SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

(Mark One)


			☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



			¨☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



Commission File Number:			001-13901



AMERIS BANCORP
(Exact name of registrant as specified in its charter)



~~GEORGIA~~Georgia			58-1456434
(State of incorporation)			(IRS Employer ID No.)



3490 Piedmont Rd N.E., Suite 1550
Atlanta	Georgia	30305
(Address of principal executive offices)


(404)			639-6500
(Registrant’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $1 per share	ABCB	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the Registrant has submitted electronically ~~and posted on its corporate Website, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.




Large accelerated filer	ý		Accelerated filer		¨☐

Non-accelerated filer		¨ ~~(Do not check if a smaller reporting company)~~☐		Smaller reporting company		¨☐

				Emerging growth company		¨☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨☐ No ý

Item 1. Financial Statements.

AMERIS BANCORP AND SUBSIDIARIES

Consolidated Balance Sheets ~~(unaudited)~~

(dollars in thousands, except per share data)


	June 30, 2023 (unaudited)		December 31, 2022
Assets
Cash and due from banks	$	284,552	$	284,567
Federal funds sold and interest-bearing deposits in banks	1,034,578		833,565
Cash and cash equivalents	1,319,130		1,118,132


Debt securities available-for-sale, at fair value, net of allowance for credit losses of $82 and $75	1,460,356		1,500,060
Debt securities held-to-maturity, at amortized cost, net of allowance for credit losses of $— and $— (fair value of $121,891 and $114,538)	142,513		134,864
Other investments	109,656		110,992
Loans held for sale, at fair value	391,472		392,078

Loans, net of unearned income	20,471,759		19,855,253
Allowance for credit losses	(272,071)		(205,677)
Loans, net	20,199,688		19,649,576

Other real estate owned, net	6,170		843
Premises and equipment, net	218,662		220,283
Goodwill	1,015,646		1,015,646
Other intangible assets, net	96,800		106,194
Cash value of bank owned life insurance	391,483		388,405

Other assets	449,042		416,213
Total assets	$	25,800,618	$	25,053,286

Liabilities
Deposits:
Noninterest-bearing	$	6,706,897	$	7,929,579
Interest-bearing	13,736,228		11,533,159
Total deposits	20,443,125		19,462,738

Other borrowings	1,536,989		1,875,736
Subordinated deferrable interest debentures	129,319		128,322
Other liabilities	406,555		389,090
Total liabilities	22,515,988		21,855,886

Commitments and Contingencies (Note 8)

Shareholders’ Equity
Preferred stock, stated value $1,000; 5,000,000 shares authorized; 0 shares issued and outstanding	—		—
Common stock, par value $1; 200,000,000 shares authorized; 72,514,630 and 72,263,727 shares issued	72,515		72,264
Capital surplus	1,939,865		1,935,211
Retained earnings	1,414,742		1,311,258
Accumulated other comprehensive loss, net of tax	(50,618)		(46,507)
Treasury stock, at cost, 3,374,847 and 2,894,677 shares	(91,874)		(74,826)
Total shareholders’ equity	3,284,630		3,197,400
Total liabilities and shareholders’ equity	$	25,800,618	$	25,053,286

(dollars and shares in thousands, except per share data)

Three Months Ended
September 30, Nine Months Ended
September 30,
2017 2016 2017 2016
Interest income

Interest and fees on loans $ 70,462
$ 57,322
$ 197,447
$ 160,677
Interest on taxable securities 5,062
4,336
15,057
13,476
Interest on nontaxable securities 392
397
1,209
1,297
Interest on deposits in other banks and federal funds sold 406
155
1,070
659
Total interest income 76,322
62,210
214,783
176,109

Interest expense

Interest on deposits 5,136
3,074
13,479
8,730
Interest on other borrowings 4,331
2,069
10,702
5,287
Total interest expense 9,467
5,143
24,181
14,017

Net interest income 66,855
57,067
190,602
162,092
Provision for loan losses 1,787
811
5,828
2,381
Net interest income after provision for loan losses 65,068
56,256
184,774
159,711

Noninterest income

Service charges on deposit accounts 10,535
11,358
31,714
31,709
Mortgage banking activity 13,340
14,067
38,498
38,420
Other service charges, commissions and fees 699
791
2,137
2,869
Gain on sale of securities —
—
37
94
Other noninterest income 2,425
2,648
8,508
8,437
Total noninterest income 26,999
28,864
80,894
81,529

Noninterest expense

Salaries and employee benefits 32,583
27,982
89,509
81,700
Occupancy and equipment expense 6,036
5,989
18,059
18,060
Data processing and communications costs 7,050
6,185
20,650
18,347
Credit resolution-related expenses 1,347
1,526
2,879
5,089
Advertising and marketing expense 1,247
1,249
3,612
2,908
Amortization of intangible assets 941
993
2,990
3,332
Merger and conversion charges 92
—
494
6,359
Other noninterest expenses 14,471
9,275
34,406
25,363
Total noninterest expense 63,767
53,199
172,599
161,158

Income before income tax expense 28,300
31,921
93,069
80,082
Income tax expense 8,142
10,364
28,671
26,159
Net income 20,158
21,557
64,398
53,923

Other comprehensive income

Net unrealized holding gains (losses) arising during period on investment securities available for sale, net of tax expense (benefit) of $966, ($1,481), $2,348 and $4,160 1,795
(2,752 ) 4,361
7,724
Reclassification adjustment for gains on investment securities included in earnings, net of tax of $0, $0, $13 and $33 —
—
(24 ) (61 )
Unrealized gains (losses) on cash flow hedges arising during period, net of tax expense (benefit) of $14, $130, ($21) and ($306) 25
241
(38 ) (567 )
Other comprehensive income 1,820
(2,511 ) 4,299
7,096
Total comprehensive income $ 21,978
$ 19,046
$ 68,697
$ 61,019

Basic earnings per common share $ 0.54
$ 0.62
$ 1.76
$ 1.58
Diluted earnings per common share $ 0.54
$ 0.61
$ 1.74
$ 1.56
Dividends declared per common share $ 0.10
$ 0.10
$ 0.30
$ 0.20
Weighted average common shares outstanding (in thousands)

Basic 37,225
34,870
36,690
34,156
Diluted 37,553
35,195
37,017
34,470


	Three Months Ended June 30, 2023

	Common Stock			Capital Surplus		Retained Earnings		Accumulated Other Comprehensive Income (Loss), Net of Tax		Treasury Stock			Total Shareholders' Equity
	Shares	Amount								Shares	Amount
Balance, March 31, 2023	72,484,210	$	72,484	$	1,937,664	$	1,362,512	$	(35,581)	3,110,347	$	(83,884)	$	3,253,195

Issuance of restricted shares	30,420	31		(31)		—		—		—	—		—



Share-based compensation	—	—		2,232		—		—		—	—		2,232
Purchase of treasury shares	—	—		—		—		—		264,500	(7,990)		(7,990)
Net income	—	—		—		62,635		—		—	—		62,635
Dividends on common shares ($0.15 per share)	—	—		—		(10,405)		—		—	—		(10,405)

Other comprehensive loss during the period	—	—		—		—		(15,037)		—	—		(15,037)
Balance, June 30, 2023	72,514,630	$	72,515	$	1,939,865	$	1,414,742	$	(50,618)	3,374,847	$	(91,874)	$	3,284,630


	Six Months Ended June 30, 2023

	Common Stock			Capital Surplus		Retained Earnings		Accumulated Other Comprehensive Income (Loss), Net of Tax		Treasury Stock			Total Shareholders' Equity
	Shares	Amount								Shares	Amount
Balance, December 31, 2022	72,263,727	$	72,264	$	1,935,211	$	1,311,258	$	(46,507)	2,894,677	$	(74,826)	$	3,197,400

Issuance of restricted shares	131,930	132		(132)		—		—		—	—		—
Issuance of common shares pursuant to PSU agreements	102,973	103		(103)		—		—		—	—		—

Proceeds from exercise of stock options	16,000	16		460		—		—		—	—		476
Share-based compensation	—	—		4,429		—		—		—	—		4,429
Purchase of treasury shares	—	—		—		—		—		480,170	(17,048)		(17,048)
Net income	—	—		—		123,056		—		—	—		123,056
Dividends on common shares ($0.30 per share)	—	—		—		(20,849)		—		—	—		(20,849)
Cumulative effect of change in accounting principle for ASU 2022-02	—	—		—		1,277		—		—	—		1,277
Other comprehensive loss during the period	—	—		—		—		(4,111)		—	—		(4,111)
Balance, June 30, 2023	72,514,630	$	72,515	$	1,939,865	$	1,414,742	$	(50,618)	3,374,847	$	(91,874)	$	3,284,630

Nine Months Ended
September 30, 2017 Nine Months Ended
September 30, 2016
Shares Amount Shares Amount
Common Stock

Balance at beginning of period 36,377,807
$ 36,378
33,625,162
$ 33,625
Issuance of common stock 2,141,072
2,141
2,549,469
2,549
Issuance of restricted shares 84,147
84
125,581
126
Cancellation of restricted shares (472 ) —
(7,085 ) (7 )
Proceeds from exercise of stock options 103,356
103
54,510
55
Issued at end of period 38,705,910
$ 38,706
36,347,637
$ 36,348

Capital Surplus

Balance at beginning of period
$ 410,276

$ 337,349
Share-based compensation
2,419

1,586
Issuance of common shares, net of issuance costs of $4,925 and $0
92,359

69,906
Issuance of restricted shares
(84 )
(126 )
Cancellation of restricted shares
—

7
Proceeds from exercise of stock options
1,809

908
Balance at end of period
$ 506,779

$ 409,630

Retained Earnings

Balance at beginning of period
$ 214,454

$ 152,820
Net income
64,398

53,923
Dividends on common shares
(11,158 )
(6,974 )
Balance at end of period
$ 267,694

$ 199,769

Accumulated Other Comprehensive Income, Net of Tax

Unrealized gains (losses) on securities and derivatives:

Balance at beginning of period
$ (1,058 )
$ 3,353
Other comprehensive income during the period
4,299

7,096
Balance at end of period
$ 3,241

$ 10,449

Treasury Stock

Balance at beginning of period 1,456,333
$ (13,613 ) 1,413,777
$ (12,388 )
Purchase of treasury shares 18,528
(886 ) 42,556
(1,225 )
Balance at end of period 1,474,861
$ (14,499 ) 1,456,333
$ (13,613 )

Total Shareholders’ Equity
$ 801,921

$ 642,583


	Three Months Ended June 30, 2022

	Common Stock			Capital Surplus		Retained Earnings		Accumulated Other Comprehensive Income, Net of Tax		Treasury Stock			Total Shareholders' Equity
	Shares	Amount								Shares	Amount
Balance, March 31, 2022	72,212,322	$	72,212	$	1,928,702	$	1,077,725	$	(1,841)	2,773,238	$	(69,639)	$	3,007,159

Issuance of restricted shares	18,953	19		(19)		—		—		—	—		—
Forfeitures of restricted shares	(10,751)	(11)		(81)		—		—		—	—		(92)
Proceeds from exercise of stock options	31,332	31		849		—		—		—	—		880
Share-based compensation	—	—		1,637		—		—		—	—		1,637
Purchase of treasury shares	—	—		—		—		—		118,157	(5,048)		(5,048)
Net income	—	—		—		90,066		—		—	—		90,066
Dividends on common shares ($0.15 per share)	—	—		—		(10,432)		—		—	—		(10,432)


Other comprehensive loss during the period	—	—		—		—		(10,794)		—	—		(10,794)
Balance, June 30, 2022	72,251,856	$	72,251	$	1,931,088	$	1,157,359	$	(12,635)	2,891,395	$	(74,687)	$	3,073,376


	Six Months Ended June 30, 2022

	Common Stock			Capital Surplus		Retained Earnings		Accumulated Other Comprehensive Income (Loss), Net of Tax		Treasury Stock			Total Shareholders' Equity
	Shares	Amount								Shares	Amount
Balance, December 31, 2021	72,017,126	$	72,017	$	1,924,813	$	1,006,436	$	15,590	2,407,898	$	(52,405)	$	2,966,451

Issuance of restricted shares	164,346	164		1,177		—		—		—	—		1,341
Forfeitures of restricted shares	(10,751)	(10)		(81)		—		—		—	—		(91)
Proceeds from exercise of stock options	81,135	80		2,244		—		—		—	—		2,324
Share-based compensation	—	—		2,935		—		—		—	—		2,935
Purchase of treasury shares	—	—		—		—		—		483,497	(22,282)		(22,282)
Net income	—	—		—		171,764		—		—	—		171,764
Dividends on common shares ($0.30 per share)	—	—		—		(20,841)		—		—	—		(20,841)


Other comprehensive loss during the period	—	—		—		—		(28,225)		—	—		(28,225)
Balance, June 30, 2022	72,251,856	$	72,251	$	1,931,088	$	1,157,359	$	(12,635)	2,891,395	$	(74,687)	$	3,073,376

See notes to unaudited consolidated financial statements.

AMERIS BANCORP AND SUBSIDIARIES

Consolidated Statements of Cash Flows (unaudited)

(dollars in thousands)


	Six Months Ended June 30,
	2023		2022
Operating Activities
Net income	$	123,056	$	171,764
Adjustments reconciling net income to net cash provided by (used in) operating activities:
Depreciation	9,409		9,191
Net losses on sale or disposal of premises and equipment	74		39

Provision for credit losses	95,245		21,155
Net write-downs and (gains) losses on sale of other real estate owned	37		(1,758)
Share-based compensation expense	4,429		3,045
Amortization of intangible assets	9,394		10,325
Amortization of operating lease right of use assets	5,672		5,750
Provision for deferred taxes	(10,507)		10,505
Net (accretion) amortization of debt securities available-for-sale	(2,834)		588
Net (accretion) amortization of debt securities held-to-maturity	(88)		51
Net amortization of other investments	753		396
Net gain on securities	—		(221)
Accretion of discount on purchased loans, net	(464)		(627)
Net amortization on other borrowings	703		216
Amortization of subordinated deferrable interest debentures	997		997
Loan servicing asset recovery	—		(20,492)
Originations of mortgage loans held for sale	(1,839,990)		(2,406,310)
Payments received on mortgage loans held for sale	8,629		19,746
Proceeds from sales of mortgage loans held for sale	1,826,177		2,833,622
Net (gains) losses on sale of mortgage loans held for sale	(819)		78,173
Originations of SBA loans	(22,506)		(30,793)
Proceeds from sales of SBA loans	24,972		40,286
Net gains on sale of SBA loans	(1,231)		(3,484)
Increase in cash surrender value of bank owned life insurance	(4,482)		(3,716)
Gain on bank owned life insurance proceeds	(486)		—



Gain on debt redemption	(1,027)		—
Change attributable to other operating activities	(949)		(24,580)
Net cash provided by operating activities	224,164		713,868

Investing Activities, net of effects of business combinations

Purchases of debt securities available-for-sale	—		(613,715)
Purchases of debt securities held-to-maturity	(8,543)		(33,217)
Proceeds from maturities and paydowns of debt securities available-for-sale	37,021		117,664

Proceeds from maturities and paydowns of debt securities held-to-maturity	982		1,362
Net (increase) decrease in other investments	583		(2,123)
Net increase in loans	(653,613)		(1,533,706)
Purchases of premises and equipment	(7,881)		(8,192)
Proceeds from sale of premises and equipment	19		46
Proceeds from sales of other real estate owned	1,955		4,962

Purchases of bank owned life insurance	—		(50,000)
Proceeds from bank owned life insurance	1,890		—


Net cash and cash equivalents paid in acquisitions	—		(14,003)
Net cash used in investing activities	(627,587)		(2,130,922)

			(Continued)

Nine Months Ended
September 30,
2017 2016
Operating Activities

Net income $ 64,398
$ 53,923
Adjustments reconciling net income to net cash provided by operating activities:

Depreciation 6,918
7,041
Net losses on sale or disposal of premises and equipment 956
112
Provision for loan losses 5,828
2,381
Net losses on sale of other real estate owned including write-downs 501
1,844
Share-based compensation expense 2,419
1,586
Amortization of intangible assets 2,990
3,332
Provision for deferred taxes (962 ) (6,369 )
Net amortization of investment securities available for sale 4,815
5,086
Net gains on securities available for sale (37 ) (94 )
Accretion of discount on purchased loans (9,023 ) (12,926 )
Amortization of premium on purchased loan pools 2,943
4,149
Net accretion (amortization) on other borrowings 62
(57 )
Amortization of subordinated deferrable interest debentures 992
1,123
Originations of mortgage loans held for sale (1,113,188 ) (1,051,812 )
Payments received on mortgage loans held for sale 799
1,167
Proceeds from sales of mortgage loans held for sale 961,831
982,898
Net gains on sale of mortgage loans held for sale (36,451 ) (41,935 )
Originations of SBA loans (25,720 ) (57,462 )
Proceeds from sales of SBA loans 23,952
21,656
Net gains on sale of SBA loans (3,423 ) (3,054 )
Increase in cash surrender value of BOLI (1,188 ) (1,318 )
Changes in FDIC loss-share receivable/payable, net of cash payments received 1,974
10,277
Change attributable to other operating activities 12,931
16,202
Net cash used in operating activities (95,683 ) (62,250 )

Investing Activities, net of effects of business combinations

Purchase of securities available for sale (83,090 ) (134,786 )
Proceeds from prepayments and maturities of securities available for sale 85,036
93,513
Proceeds from sales of securities available for sale 3,090
53,026
Net increase in other investments (12,669 ) (13,050 )
Net increase in loans, excluding purchased loans (786,548 ) (556,182 )
Payments received on purchased loans 155,033
186,319
Purchases of loan pools —
(151,481 )
Payments received on purchased loan pools 95,533
115,409
Purchases of premises and equipment (3,016 ) (8,250 )
Proceeds from sales of premises and equipment 16
207
Proceeds from sales of other real estate owned 11,989
18,329
Payments received from (payments to) FDIC under loss-share agreements (97 ) 4,770
Net cash proceeds paid in acquisitions —
(7,205 )
Net cash used in investing activities (534,723 ) (399,381 )

(Continued)

AMERIS BANCORP AND SUBSIDIARIES

Consolidated Statements of Cash Flows (unaudited)

(dollars in thousands)


	Six Months Ended June 30,
	2023		2022
Financing Activities, net of effects of business combinations
Net increase in deposits	$	980,387	$	19,429
Net decrease in securities sold under agreements to repurchase	—		(4,892)
Proceeds from other borrowings	10,625,000		—
Repayment of other borrowings	(10,963,423)		(314,503)


Proceeds from exercise of stock options	476		2,324
Dividends paid - common stock	(20,971)		(20,843)
Purchase of treasury shares	(17,048)		(22,282)
Net cash provided by (used in) financing activities	604,421		(340,767)

Net increase (decrease) in cash, cash equivalents and restricted cash	200,998		(1,757,821)
Cash, cash equivalents and restricted cash at beginning of period	1,118,132		4,064,657
Cash, cash equivalents and restricted cash at end of period	$	1,319,130	$	2,306,836

Supplemental Disclosures of Cash Flow Information
Cash paid (received) during the period for:
Interest	$	182,077	$	23,472
Income taxes	62,186		51,851
Loans transferred to other real estate owned	7,319		229
Loans transferred from loans held for sale to loans held for investment	5,374		167,727

Loans provided for the sales of other real estate owned	—		2,288


Right-of-use assets obtained in exchange for new operating lease liabilities	2,022		1,537
Assets acquired in business acquisitions	—		10,734
Liabilities assumed in business acquisitions	—		(3,269)


Change in unrealized loss on securities available-for-sale, net of tax	(4,111)		(28,225)



			(Concluded)

Nine Months Ended
September 30,
2017 2016
Financing Activities, net of effects of business combinations

Net increase in deposits $ 320,341
$ 25,448
Net decrease in securities sold under agreements to repurchase (39,349 ) (20,938 )
Proceeds from other borrowings 1,687,692
339,500
Repayment of other borrowings (1,371,503 ) (53,513 )
Issuance of common stock 88,656
—
Proceeds from exercise of stock options 1,912
963
Dividends paid - common stock (10,927 ) (5,096 )
Purchase of treasury shares (886 ) (1,225 )
Net cash provided by financing activities 675,936
285,139

Net increase (decrease) in cash and cash equivalents 45,530
(176,492 )
Cash and cash equivalents at beginning of period 198,385
390,563
Cash and cash equivalents at end of period $ 243,915
$ 214,071

Supplemental Disclosures of Cash Flow Information

Cash paid during the period for:

Interest $ 23,369
$ 13,791
Income taxes 28,212
30,969
Loans (excluding purchased loans) transferred to other real estate owned 4,043
2,101
Purchased loans transferred to other real estate owned 4,294
6,262
Loans transferred from loans held for sale to loans held for investment 165,352
94,601
Loans provided for the sales of other real estate owned 1,334
1,471
Assets acquired in business acquisitions —
561,440
Liabilities assumed in business acquisitions —
465,048
Issuance of common stock in acquisitions —
72,455
Issuance of common stock in exchange for equity investment in US Premium Finance Holding Company 5,844
—
Change in unrealized gain (loss) on securities available for sale, net of tax 4,337
7,724
Change in unrealized gain (loss) on cash flow hedge, net of tax (38 ) (567 )

(Concluded)

See notes to unaudited consolidated financial statements.

AMERIS BANCORP AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

~~September~~June 30, ~~2017~~2023

NOTE 1 – BASIS OF PRESENTATION AND ACCOUNTING POLICIES

Nature of Business

Ameris Bancorp (the “Company” or “Ameris”) is a financial holding company headquartered in ~~Moultrie,~~Atlanta, Georgia. Ameris conducts substantially all of its operations through its wholly owned banking subsidiary, Ameris Bank (the “Bank”). At ~~September~~June 30, ~~2017,~~2023, the Bank operated 97164 branches in select markets in Georgia, Alabama, Florida, North Carolina and South Carolina. Our business model capitalizes on the efficiencies of a large financial services company, while still providing the community with the personalized banking service expected by our customers. We manage our Bank through a balance of decentralized management responsibilities and efficient centralized operating systems, products and loan underwriting standards. The Company’s Board of Directors and senior managers establish corporate policy, strategy and administrative policies. Within our established guidelines and policies, the banker closest to the customer responds to the differing needs and demands of his or her unique market.

Basis of Presentation

The accompanying unaudited consolidated financial statements for Ameris have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statement presentation. The interim consolidated financial statements included herein are unaudited but reflect all adjustments, ~~(consisting~~consisting of normal recurring ~~accruals)~~adjustments, which, in the opinion of management, are necessary for a fair presentation of the consolidated financial position and results of operations for the interim periods presented. All significant intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the ~~period~~three and six months ended ~~September~~June 30, ~~2017~~2023 are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the financial statements and notes thereto ~~and the report of our registered independent public accounting firm~~ included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2022.

~~Accounting Policy Update~~In preparing the consolidated financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

~~Other Investments~~ – ~~Other investments include Federal Home Loan Bank (“FHLB”) stock, Federal Reserve Bank stock~~Cash and a minority equity investment in US Premium Finance Holding Company, a Florida corporation (“USPF”). These investments do not have readily determinable fair values and are carried at cost. They are periodically reviewed for impairment based on ultimate recoveryCash Equivalents

For purposes of ~~par value or cost basis. Both stock~~reporting cash flows, cash and cash ~~dividends are reported as income. For additional information regarding the Company’s minority equity investment~~equivalents include cash on hand, cash items in ~~USPF, see Note 2.~~process of collection, amounts due from banks, interest-bearing deposits in banks, federal funds sold and restricted cash. There was no restricted cash held at both June 30, 2023 and December 31, 2022.

Reclassifications

Certain reclassifications of prior year amounts have been made to conform with the current year presentations. The reclassifications had no effect on net income or shareholders' equity as previously reported.

Accounting Standards Adopted in ~~2017~~2023

ASU ~~2016-09~~No. 2022-02 –~~Improvements to Employee Share-Based Payment Accounting~~ (“ASU 2016-09”). ASU 2016-09 simplifies various aspects of how share-based payments are accounted for and presented in the financial statements. Under ASU 2016-09, companies will record all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement and will no longer record excess tax benefits and certain tax deficiencies in additional paid-in capital. The standard eliminates the requirement that excess tax benefits be realized before companies can recognize them. The excess tax benefits will be reported as an operating activity on the statement of cash flows, and the cash paid to a tax authority when shares are withheld to satisfy a company’s statutory income tax withholding obligation will be reported as a financing activity on its statement of cash. In addition, the standard increases the amount an employer can withhold to cover income taxes on awards and still qualify for the exception to liability classification for shares used to satisfy the employer’s statutory income tax withholding obligation. ASU 2016-09 permits companies to make an accounting policy election for the impact of forfeitures on the recognition of expense for share-based payment awards. Forfeitures can be estimated, as required today, or recognized when they occur. The Company has elected to recognize forfeitures as they occur. ASU 2016-09 became effective on January 1, 2017 and did not have a material impact on the consolidated financial statements.

~~Accounting Standards Pending Adoption~~

~~ASU 2017-12 –~~ ~~"Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities~~ ("ASU 2017-12"). The purposes of ASU 2017-12 are to (1) improve the transparency and understandability of information conveyed in financial statements about an entity’s risk management activities by better aligning the entity’s financial reporting for hedging relationships with the economic objectives of those risk management activities and (2) reduce the complexity of and simplify the application of hedge accounting by preparers. ASU 2017-12 is effective for interim and annual reporting periods beginning after December 15, 2018 with early adoption in an interim period permitted. ASU 2017-12 requires a modified retrospective transition method in which the Company will recognize the cumulative effect of the change on the opening balance of each affected component of equity in the statement of financial position as of the beginning of the fiscal year of adoption. The Company is currently evaluating the provisions of ASU 2017-12 to determine the potential impact the new standard will have on the Company’s results of operations, financial position and disclosures, but it is not expected to have a material impact.

~~ASU 2017-09 –~~ ~~“Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting~~ (“ASU 2017-09”). ASU 2017-09 clarifies when changes to the terms of a share-based award must be accounted for as a modification. Companies must apply the modification accounting guidance if any of the following change: the shard-based award’s fair value, vesting provisions or classification as an equity instrument or a liability instrument. The new guidance should reduce diversity in practice and result in fewer changes to the terms of share-based awards being accounted for as modifications, as the guidance will allow companies to make certain non-substantive changes to share-based awards without accounting for them as modifications. ASU 2017-09 is effective for interim and annual reporting periods beginning after December 15, 2017 with early adoption permitted. ASU 2017-09 is not expected to have a material impact on the Company’s results of operations, financial position or disclosures.

~~ASU 2017-08 –~~ ~~“Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities~~ (“ASU 2017-08”). ASU 2017-08 shortens the amortization period for certain purchased callable debt securities held at a premium, shortening such period to the earliest call date. Under the current guidance, entities generally amortize the premium on a callable debt security as an adjustment of yield over the contractual life (to maturity date) of the instrument. This ASU does not require any accounting change in the accounting for debt securities held at a discount; the discount continues to be amortized as an adjustment of yield over the contractual life (to maturity) of the instrument. ASU 2017-08 is effective for interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. Upon adoption, ASU 2017-08 provides for a modified retrospective transition by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. The Company is currently evaluating the provisions of ASU 2017-08 to determine the potential impact the new standard will have on the Company’s results of operations, financial position and disclosures, but it is not expected to have a material impact.

~~ASU 2017-04 –~~ ~~Intangibles: Goodwill and Other: Simplifying the Test for Goodwill Impairment~~ (“ASU 2017-04”). ASU 2017-04 eliminates Step 2 from the goodwill impairment test to simplify the subsequent measurement of goodwill. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, the income tax effects of tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. ASU 2017-04 also eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the qualitative impairment test is necessary. The standard must be adopted using a prospective basis and the nature and reason for the change in accounting principle should be disclosed upon transition. ASU 2017-04 is effective for annual or any interim goodwill impairment tests in reporting periods beginning after December 15, 2019. Early adoption is permitted on testing dates after January 1, 2017. The Company is currently evaluating the impact this standard will have on the Company’s results of operations, financial position and disclosures, but it is not expected to have a material impact.

~~ASU 2017-01 –~~ ~~Business Combinations (Topic 805): Clarifying the Definition of a Business~~ (“ASU 2017-01”). ASU 2017-01 provides a framework to use in determining when a set of assets and activities is a business. The standard provides more consistency in applying the business combination guidance, reduces the costs of application, and makes the definition of a business more operable. ASU 2017-01 is effective for interim and annual periods within those annual periods beginning after December 15, 2017. The Company is currently evaluating the impact this standard will have on the Company’s results of operations, financial position and disclosures, but it is not expected to have a material impact.

~~ASU 2016-13~~ Financial Instruments - ~~Financial Instruments—~~Credit Losses (Topic 326): ~~Measurement of Credit Losses on Financial Instruments~~ (“Troubled Debt Restructurings and Vintage Disclosures ("ASU ~~2016-13”~~2022-02"). ASU ~~2016-13 significantly changes how~~2022-02 eliminates the troubled debt restructuring ("TDR") measurement and recognition guidance and requires that entities ~~will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard will replace~~evaluate whether the ~~current incurred loss approach~~modification represents a new loan or a continuation of an existing loan consistent with ~~an expected loss model, referred to as the current expected credit loss (“CECL”) model. The new standard will apply to~~

financial assets subject to credit losses and measured at amortized cost and certain off-balance-sheet credit exposures, which include, but are not limited to, loans, leases, held-to-maturity securities, loan commitments and financial guarantees. ASU 2016-13 simplifies the accounting for ~~purchased credit-impaired debt securities and loans and expands the~~other loan modifications. Additional disclosures relating to modifications to borrowers experiencing financial difficulty are required under ASU 2022-02. ASU 2022-02 also requires disclosure requirements regarding an entity’s assumptions, models and methods for estimating the allowance for loan and lease losses. In addition, entities will need to disclose the amortized cost balance for each class of ~~financial asset~~current-period gross write-offs by ~~credit quality indicator, disaggregated by the~~ year of origination. The Company adopted this ASU ~~2016-13 is~~ effective January 1, 2023 on a prospective basis, except for ~~interim~~the amendments related to recognition and annual reporting periods beginning after December 15, 2019. Early adoption is permitted for interim and annual reporting periods beginning after December 15, 2018. Upon adoption, ASU 2016-13 provides for ameasurement of TDRs, which were adopted using the modified retrospective ~~transition by means of~~method. The adoption was not material and resulted in a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is effective. While the Company is currently evaluating the impact this standard will have on the results of operations, financial position and disclosures, the Company expects to recognize a one-time cumulative effect adjustmentreduction to the allowance for ~~loan~~credit losses asof $1.7 million and an increase to retained earnings of $1.3 million.

ASU No. 2022-06 - Reference Rate Reform (Topic 848): Deferral of the ~~beginning~~Sunset Date of Topic 848. ASU No. 2022-06 extends the ~~first reporting~~temporary relief in Topic 848 from December 31, 2022 to December 31, 2024. Topic 848 provides optional guidance to ease the potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting. The objective of this guidance is to provide temporary relief during the transition period ~~in which the~~away from LIBOR toward new ~~standard is effective.~~interest rate benchmarks. This update was effective upon issuance. The Company ~~has established a steering committee which includes~~adopted the ~~appropriate members of management to evaluate~~guidance in Topic 848 effective January 1, 2023 and the ~~impact this ASU will have on Company’s financial position, results of operations and financial statement disclosures and determine~~adoption was not material the most appropriate method of implementing the amendments in this ASU as well as any resources needed to implement the amendments. This committee has identified the software vendor of choice for implementation, established an implementation timeline and continues to stay current on implementation issues and concerns.

~~ASU 2016-02 –~~ ~~Leases (Topic 842)~~ (“ASU 2016-02”). ASU 2016-02 amends the existing standards for lease accounting effectively requiring most leases be carried on the balance sheets of the related lessees by requiring them to recognize a right-of-use asset and a corresponding lease liability. ASU 2016-02 includes qualitative and quantitative disclosure requirements intended to provide greater insight into the nature of an entity’s leasing activities. The standard must be adopted using a modified retrospective transition with a cumulative-effect adjustment to equity as of the beginning of the period in which it is adopted. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods with early adoption permitted. The Company has several leased facilities, which are currently treated as operating leases, and are not currently shown on the Company’s consolidated balance sheet. After ASU 2016-02 is implemented, the Company expects to begin reporting these lease agreements on the balance sheet as a right-of-use asset and a corresponding liability. The Company is currently evaluating the impact this standard will have on the Company’s consolidated statement of income and comprehensive income, consolidated statement of stockholders’ equity and consolidated statement of cash flows, but it is not expected to have a material impact.

~~ASU 2014-09 –~~ ~~Revenue from Contracts with Customers~~ (“ASU 2014-09”). ASU 2014-09 provides guidance that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective prospectively, for annual and interim periods, beginning after December 15, 2017. Management has substantially completed its evaluation of the impact ASU 2014-09 will have on the Company’s consolidated financial statements. Based on this evaluation to date, management has determined that for the revenue streams of the Company within the scope of ASU 2014-09, the new accounting guidance will not change the timing or amount of revenue recognized. The adoption of ASU 2014-09 is not expected to have a material impact on the Company's consolidated financial statements.

~~NOTE 2 – INVESTMENT IN US PREMIUM FINANCE HOLDING COMPANY~~

On December 15, 2016, the Bank entered into a Management and License Agreement with William J. Villari and USPF pursuant to which Mr. Villari will manage a division of the Bank to be operated under the name “US Premium Finance” and which is to be engaged in the business of soliciting, originating, servicing, administering and collecting loans made for purposes of funding insurance premiums and other loans made to persons engaged in the insurance business.

Also on December 15, 2016, the Company entered into a Stock Purchase Agreement with Mr. Villari pursuant to which the Company agreed to purchase from Mr. Villari 4.99% of the outstanding shares of common stock of USPF. As consideration for such shares, the Company agreed to issue to Mr. Villari 128,572 unregistered shares of its common stock in a private placement transaction pursuant to the exemptions from registration provided in Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506 of Regulation D promulgated thereunder. Those transactions closed on January 18, 2017, and a registration statement was filed with the Securities and Exchange Commission on February 13, 2017 to register the resale or other disposition of the shares of common stock that were issued to Mr. Villari.

The Company’s 4.99% investment in USPF was valued at $5.8 million, based upon the closing price of the Company’s common stock immediately prior to the parties’ execution of the Stock Purchase Agreement, as follows:

(dollars in thousands, except per share amount)
Ameris common shares issued 128,572
Price per share of the Company's common stock $ 45.45
Fair value of consideration transferred $ 5,844

Because USPF does not have a readily determinable fair value and Ameris does not exercise significant influence over USPF, the investment is carried at cost and is included in other investments in the Company’s consolidated balance sheet. The net carrying value of the Company’s investment in USPF was $5.8 million as of September 30, 2017.

NOTE 32 – INVESTMENT SECURITIES

The Company’s investment policy blends the Company’s liquidity needs and interest rate risk management with its desire to increase income and provide funds for expected growth in loans. The investment securities portfolio consists primarily of U.S. government-sponsored mortgage-backed securities and state, county and municipal securities. The Company’s portfolio and investing philosophy concentrate activities in obligations where the credit risk is limited. For the small portion of the Company’s portfolio found to present credit risk, the Company has reviewed the investments and financial performance of the obligors and believes the credit risk to be acceptable.

The amortized cost and estimated fair value of ~~investment~~ securities ~~available for sale,~~available-for-sale along with gross unrealized gains and losses are summarized as follows:

(dollars in thousands)
Amortized
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Estimated
Fair
Value
September 30, 2017
U.S. government sponsored agencies $ 1,000
$ 4
$ —
$ 1,004
State, county and municipal securities 140,190
3,271
(74 ) 143,387
Corporate debt securities 46,704
661
(116 ) 47,249
Mortgage-backed securities 626,927
3,774
(2,748 ) 627,953
Total debt securities $ 814,821
$ 7,710
$ (2,938 ) $ 819,593

December 31, 2016
U.S. government sponsored agencies $ 999
$ 21
$ —
$ 1,020
State, county and municipal securities 149,899
2,605
(469 ) 152,035
Corporate debt securities 32,375
167
(370 ) 32,172
Mortgage-backed securities 641,362
2,700
(6,554 ) 637,508
Total debt securities $ 824,635
$ 5,493
$ (7,393 ) $ 822,735


(dollars in thousands) Securities available-for-sale	Amortized Cost		Allowance for Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
June 30, 2023
U.S. Treasuries	$	779,382	$	—	$	—	$	(20,716)	$	758,666
U.S. government-sponsored agencies	1,029		—		—		(57)		972
State, county and municipal securities	33,340		—		1		(1,113)		32,228
Corporate debt securities	15,897		(82)		—		(760)		15,055
SBA pool securities	25,799		—		3		(1,976)		23,826
Mortgage-backed securities	669,371		—		16		(39,778)		629,609
Total debt securities available-for-sale	$	1,524,818	$	(82)	$	20	$	(64,400)	$	1,460,356

December 31, 2022
U.S. Treasuries	$	775,784	$	—	$	131	$	(16,381)	$	759,534
U.S. government-sponsored agencies	1,036		—		—		(57)		979
State, county and municipal securities	35,358		—		17		(1,180)		34,195
Corporate debt securities	16,397		(75)		—		(396)		15,926
SBA pool securities	29,422		—		3		(2,027)		27,398
Mortgage-backed securities	701,008		—		113		(39,093)		662,028
Total debt securities available-for-sale	$	1,559,005	$	(75)	$	264	$	(59,134)	$	1,500,060

The amortized cost and estimated fair value of securities held-to-maturity along with gross unrealized gains and losses are summarized as follows:


(dollars in thousands) Securities held-to-maturity	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
June 30, 2023


State, county and municipal securities	$	31,905	$	—	$	(5,297)	$	26,608


Mortgage-backed securities	110,608		—		(15,325)		95,283
Total debt securities held-to-maturity	$	142,513	$	—	$	(20,622)	$	121,891



December 31, 2022


State, county and municipal securities	$	31,905	$	—	$	(5,380)	$	26,525


Mortgage-backed securities	102,959		—		(14,946)		88,013
Total debt securities held-to-maturity	$	134,864	$	—	$	(20,326)	$	114,538

The amortized cost and estimated fair value of debt securities available-for-sale ~~securities at September~~and held-to-maturity as of June 30, ~~2017~~2023, by contractual maturity are ~~summarized in the table~~shown below. ~~Expected maturities for mortgage-backed securities~~Maturities may differ from contractual maturities ~~because~~ in ~~certain cases borrowers can prepay obligations~~mortgage-backed securities because

the mortgages underlying these securities may be called or repaid without ~~prepayment penalties.~~penalty. Therefore, these securities are not included in the maturity categories in the following maturity ~~summary.~~summary:


						Available-for-Sale				Held-to-Maturity
(dollars in thousands)	Amortized Cost		Estimated Fair Value		(dollars in thousands)	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	14,094	$	14,205	Due in one year or less	$	95,908	$	94,723	$	—	$	—
Due from one year to five years	57,385		58,204		Due from one year to five years	724,844		704,037		—		—
Due from five to ten years	77,194		79,093		Due from five to ten years	12,849		12,129		—		—
Due after ten years	39,221		40,138		Due after ten years	21,846		19,858		31,905		26,608
Mortgage-backed securities	626,927		627,953		Mortgage-backed securities	669,371		629,609		110,608		95,283
	$	814,821	$	819,593		$	1,524,818	$	1,460,356	$	142,513	$	121,891

Securities with a carrying value of approximately ~~$238.6~~$860.6 million and $861.6 million at June 30, 2023 and December 31, 2022, respectively, serve as collateral to secure public deposits ~~securities sold under agreements to repurchase~~ and for other purposes required or permitted by ~~law at September 30, 2017, compared with $618.2 million at December 31, 2016.~~law.

The following table ~~details~~shows the gross unrealized losses and estimated fair value of available-for-sale securities aggregated by category and ~~duration~~length of time that securities have been in a continuous unrealized loss position at ~~September~~June 30, ~~2017~~2023 and December 31, ~~2016.~~2022:


	Less Than 12 Months				12 Months or More				Total
(dollars in thousands) Securities available-for-sale	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
June 30, 2023
U.S. Treasuries	$	522,853	$	(11,833)	$	235,813	$	(8,883)	$	758,666	$	(20,716)
U.S. government-sponsored agencies	—		—		972		(57)		972		(57)
State, county and municipal securities	19,141		(337)		12,002		(776)		31,143		(1,113)
Corporate debt securities	867		(30)		13,188		(730)		14,055		(760)
SBA pool securities	465		(28)		23,198		(1,948)		23,663		(1,976)
Mortgage-backed securities	328,380		(16,691)		299,788		(23,087)		628,168		(39,778)
Total debt securities available-for-sale	$	871,706	$	(28,919)	$	584,961	$	(35,481)	$	1,456,667	$	(64,400)

December 31, 2022
U.S. Treasuries	$	725,250	$	(16,381)	$	—	$	—	$	725,250	$	(16,381)
U.S. government sponsored agencies	979		(57)		—		—		979		(57)
State, county and municipal securities	27,438		(1,180)		—		—		27,438		(1,180)
Corporate debt securities	13,271		(126)		1,155		(270)		14,426		(396)
SBA pool securities	17,806		(1,298)		9,329		(729)		27,135		(2,027)
Mortgage-backed securities	620,544		(37,774)		16,847		(1,319)		637,391		(39,093)
Total debt securities available-for-sale	$	1,405,288	$	(56,816)	$	27,331	$	(2,318)	$	1,432,619	$	(59,134)

Less Than 12 Months 12 Months or More Total
(dollars in thousands)
Estimated
Fair
Value

Unrealized
Losses

Estimated
Fair
Value

Unrealized
Losses

Estimated
Fair
Value

Unrealized
Losses
September 30, 2017

U.S. government sponsored agencies $ —
$ —
$ —
$ —
$ —
$ —
State, county and municipal securities 11,333
(18 ) 4,240
(56 ) 15,573
(74 )
Corporate debt securities 8,131
(35 ) 10,854
(81 ) 18,985
(116 )
Mortgage-backed securities 225,258
(1,685 ) 54,465
(1,063 ) 279,723
(2,748 )
Total debt securities $ 244,722
$ (1,738 ) $ 69,559
$ (1,200 ) $ 314,281
$ (2,938 )

December 31, 2016

U.S. government sponsored agencies $ —
$ —
$ —
$ —
$ —
$ —
State, county and municipal securities 47,647
(469 ) —
—
47,647
(469 )
Corporate debt securities 18,377
(363 ) 493
(7 ) 18,870
(370 )
Mortgage-backed securities 414,300
(6,177 ) 11,791
(377 ) 426,091
(6,554 )
Total debt securities $ 480,324
$ (7,009 ) $ 12,284
$ (384 ) $ 492,608
$ (7,393 )

As of ~~September~~June 30, ~~2017,~~2023, the Company’s ~~securities~~available-for-sale security portfolio consisted of ~~421~~429 securities, ~~119~~423 of which were in an unrealized loss position. ~~The majority of unrealized losses are related to the Company’s mortgage-backed securities, as discussed below.~~

At ~~September~~June 30, ~~2017,~~2023, the Company held ~~101~~327 mortgage-backed securities that were in an unrealized loss position, all of which were issued by U.S. government-sponsored entities and agencies. Because the decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality, and because the Company does not have the intent to sell these mortgage-backed securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the Company does not consider these securities to be other-than-temporarily impaired at SeptemberAt June 30, ~~2017.~~

~~At September 30, 2017,~~2023, the Company held ~~nine~~30 U.S. Small Business Administration (“SBA”) pool securities, 31 state, county and municipal securities, six corporate securities, one U.S. government-sponsored agency security, and ~~nine corporate debt~~28 U.S. Treasury securities that were in an unrealized loss position. ~~Because~~

The following table shows the ~~decline in~~gross unrealized losses and estimated fair value ~~is attributable to changes~~of held-to-maturity securities aggregated by category and length of time that securities have been in ~~interest rates~~a continuous unrealized loss position at June 30, 2023 and ~~illiquidity, and not credit quality, and because~~December 31, 2022:


	Less Than 12 Months				12 Months or More				Total
(dollars in thousands) Securities held-to-maturity	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
June 30, 2023

State, county and municipal securities	$	7,486	$	(514)	$	19,122	$	(4,783)	$	26,608	$	(5,297)


Mortgage-backed securities	31,528		(1,270)		63,755		(14,055)		95,283		(15,325)
Total debt securities held-to-maturity	$	39,014	$	(1,784)	$	82,877	$	(18,838)	$	121,891	$	(20,622)

December 31, 2022

State, county and municipal securities	$	16,512	$	(1,488)	$	10,013	$	(3,892)	$	26,525	$	(5,380)


Mortgage-backed securities	32,471		(1,925)		55,542		(13,021)		88,013		(14,946)
Total debt securities held-to-maturity	$	48,983	$	(3,413)	$	65,555	$	(16,913)	$	114,538	$	(20,326)

As of June 30, 2023, the Company’s held-to-maturity security portfolio consisted of 27 securities, all of which were in an unrealized loss position. At June 30, 2023, the Company ~~does not have the intent to sell these~~held 21 mortgage-backed securities and ~~it is likely~~six state, county and municipal securities that ~~it will not be required to sell~~were in an unrealized loss position.

At June 30, 2023 and December 31, 2022, all of the Company’s mortgage-backed securities ~~before their anticipated recovery, the Company does not consider these securities to be other-than-temporarily impaired at September 30, 2017.~~

The Company’s investments in corporate debt include investments in regional and super-regional banks on which the Company prepares regular analysis through review of financial information and credit ratings. Investments in preferred securities are also concentrated in the preferredwere obligations of regional and super-regional banks through non-pooled investment structures. The Company did not have investments in “pooled” trust preferred securities at September 30, 2017 or December 31, 2016.government-sponsored agencies.

Management and the Company’s Asset and Liability Committee (the “ALCO Committee”) evaluate available-for-sale securities ~~for other-than-temporary impairment~~in an unrealized loss position on at least on a quarterly basis, and more frequently when economic or market ~~conditions~~concerns warrant such ~~evaluation. While~~evaluation, to determine if credit-related impairment exists. Management first evaluates whether they intend to sell or more likely than not will be required to sell an impaired security before recovering its amortized cost basis. If either criteria is met, the ~~majority~~entire amount of unrealized loss is recognized in earnings with a corresponding adjustment to the security's amortized cost basis. If either of the ~~unrealized losses on debt securities relate~~above criteria is not met, management evaluates whether the decline in fair value is attributable to changes in interest rates, corporate debt securities have also been affected by reduced levels of liquidity and higher risk premiums. Occasionally, management engages independent third parties to evaluate the Company’s position in certain corporate debt securities to aid management and the ALCO Committee in its determination regarding the status of impairment.credit or resulted from other factors. The ~~Company believes that each investment poses minimal credit risk and further, that the~~ Company does not intend to sell these available-for-sale investment securities at an unrealized loss position at ~~September~~June 30, ~~2017,~~2023, and it is more likely than not that the Company will not be required to sell these securities prior to recovery or maturity. ~~Therefore,~~Based on the results of management's review, at ~~September~~June 30, ~~2017, these investments are not considered impaired~~2023, management determined that $82,000 was attributable to credit impairment and an allowance for credit losses was recorded. The remaining $64.4 million in unrealized loss was determined to be from factors other than credit.


(dollars in thousands)	Three Months Ended June 30,				Six Months Ended June 30,
Allowance for credit losses	2023		2022		2023		2022
Beginning balance	$	82	$	—	$	75	$	—
Provision for other credit losses	—		88		7		88
Ending balance	$	82	$	88	$	82	$	88

The Company's held-to-maturity securities have no expected credit losses, and no related allowance for credit losses has been established.

Total net gain (loss) on ~~an other-than-temporary basis.~~

~~At September 30, 2017~~securities reported on the consolidated statements of income and ~~December 31, 2016, all~~comprehensive income is comprised of the ~~Company’s mortgage-backed securities were obligations of government-sponsored agencies.~~

~~The~~ following ~~table is a summary of sales activities in the Company’s investment securities available for sale~~ for the ~~nine~~three and six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016:~~2022:


	Three Months Ended June 30,				Six Months Ended June 30,
(dollars in thousands)	2023		2022		2023		2022

Unrealized holding gains (losses) on equity securities	$	(6)	$	(22)	$	—	$	(49)
Net realized gains on sales of other investments	—		270		—		270
Net gain (loss) on securities	$	(6)	$	248	$	—	$	221

(dollars in thousands) September 30,
2017 September 30,
2016
Gross gains on sales of securities $ 38
$ 312
Gross losses on sales of securities (1 ) (218 )
Net realized gains on sales of securities available for sale $ 37
$ 94

Sales proceeds $ 3,090
$ 53,026

NOTE 43 – LOANS AND ALLOWANCE FOR CREDIT LOSSES

The Bank engages in a full complement of lending activities, including real estate-related loans, agriculture-related loans, commercial and financial loans and consumer installment loans within select markets in Georgia, Alabama, Florida and South Carolina. The Bank purchased residential mortgage loan pools during 2015 and 2016 collateralized by properties located outside our Southeast markets, specifically in California, Washington and Illinois. During the third quarter of 2016, the Bank began purchasing from an unrelated third party consumer installment home improvement loans made to borrowers throughout the United States. As of September 30, 2017 and December 31, 2016, the net carrying value of these consumer installment home improvement loans was approximately $148.0 million and $60.8 million, respectively. During the fourth quarter of 2016, the Bank purchased a pool of commercial insurance premium finance loans made to borrowers throughout the United States and began to originate, administer and service these types of loans. As of September 30, 2017 and December 31, 2016, the net carrying value of commercial insurance premium loans was approximately $487.9 million and $353.9 million, respectively, and such loans are reported in the commercial, financial and agricultural loan category.

The Bank concentrates the majority of its lending activities in real estate loans. While risk of loss in the Company’s portfolio is primarily tied to the credit quality of the various borrowers, risk of loss may increase due to factors beyond the Company’s control, such as local, regional and/or national economic downturns. General conditions in the real estate market may also impact the relative risk in the real estate portfolio. A substantial portion of the Bank’s loans are secured by real estate in the Bank’s primary market area. In addition, a substantial portion of the OREO is located in those same markets. Accordingly, the ultimate collectability of a substantial portion of the Bank’s loan portfolio and the recovery of a substantial portion of the carrying amount of OREO are susceptible to changes in real estate conditions in the Bank’s primary market area.

Commercial, financial and agricultural loans include both secured and unsecured loans for working capital, expansion, crop production, commercial insurance premium finance, and other business purposes. Commercial, financial and agricultural loans also include SBA loans and municipal loans. Short-term working capital loans are secured by non-real estate collateral such as accounts receivable, crops, inventory and equipment. The Bank evaluates the financial strength, cash flow, management, credit history of the borrower and the quality of the collateral securing the loan. The Bank often requires personal guarantees and secondary sources of repayment on commercial, financial and agricultural loans.

Real estate loans include construction and development loans, commercial and farmland loans and residential loans. Construction and development loans include loans for the development of residential neighborhoods, one-to-four family home residential construction loans to builders and consumers, and commercial real estate construction loans, primarily for owner-occupied properties. The Company limits its construction lending risk through adherence to established underwriting procedures. Commercial real estate loans include loans secured by owner-occupied commercial buildings for office, storage, retail, farmland and warehouse space. They also include non-owner occupied commercial buildings such as leased retail and office space. Commercial real estate loans may be larger in size and may involve a greater degree of risk than one-to-four family residential mortgage loans. Payments on such loans are often dependent on successful operation or management of the properties. The Company’s residential loans represent permanent mortgage financing and are secured by residential properties located within the Bank's market areas, along with warehouse lines of credit secured by residential mortgages.

Consumer installment loans and other loans include home improvement loans, automobile loans, boat and recreational vehicle financing, and secured and unsecured personal loans. Consumer loans carry greater risks than other loans, as the collateral can consist of rapidly depreciating assets such as automobiles and equipment that may not provide an adequate source of repayment of the loan in the case of default.

Loans are stated at ~~unpaid balances, net of unearned income and deferred loan fees.~~amortized cost. Balances within the major loans receivable categories are presented in the following ~~table, excluding purchased loans:~~table:


(dollars in thousands)	September 30, 2017		December 31, 2016		(dollars in thousands)	June 30, 2023		December 31, 2022
Commercial, financial and agricultural	$	1,307,209	$	967,138	Commercial, financial and agricultural	$	2,718,831	$	2,679,403
Consumer					Consumer	307,486		384,037
Indirect automobile					Indirect automobile	63,231		108,648
Mortgage warehouse					Mortgage warehouse	1,147,413		1,038,924
Municipal					Municipal	510,410		509,151
Premium finance					Premium finance	988,731		1,023,479
Real estate – construction and development	550,189		363,045		Real estate – construction and development	2,217,744		2,086,438
Real estate – commercial and farmland	1,558,882		1,406,219		Real estate – commercial and farmland	7,815,779		7,604,867
Real estate – residential	969,289		781,018		Real estate – residential	4,702,134		4,420,306
Consumer installment	183,314		96,915
Other	5,795		12,486
	$	4,574,678	$	3,626,821		$	20,471,759	$	19,855,253

~~Purchased~~Accrued interest receivable on loans ~~are defined as loans that were acquired~~is reported in ~~bank acquisitions including those that are covered by a loss-sharing agreement with~~other assets on the ~~Federal Deposit Insurance Corporation (the “FDIC”). Purchased loans~~consolidated balance sheets totaling ~~$917.1~~$69.8 million and ~~$1.07 billion~~$69.3 million at ~~September~~June 30, ~~2017~~2023 and December 31, ~~2016, respectively, are not included in the above schedule.~~

~~Purchased~~2022, respectively. The Company had no recorded allowance for credit related to accrued interest on loans ~~are shown below according to major loan type as of the end of the periods shown:~~

(dollars in thousands) September 30,
2017 December 31,
2016
Commercial, financial and agricultural $ 80,895
$ 96,537
Real estate – construction and development 68,583
81,368
Real estate – commercial and farmland 500,169
576,355
Real estate – residential 264,312
310,277
Consumer installment 3,167
4,654
$ 917,126
$ 1,069,191

~~A rollforward of purchased loans for the nine months ended September~~at both June 30, ~~2017 and 2016 is shown below:~~

(dollars in thousands) September 30,
2017 September 30,
2016
Balance, January 1 $ 1,069,191
$ 909,083
Charge-offs, net of recoveries (1,761 ) (3,122 )
Additions due to acquisitions —
402,942
Accretion 9,023
12,926
Transfers to purchased other real estate owned (4,294 ) (6,262 )
Payments received (155,033 ) (186,276 )
Other —
90
Ending balance $ 917,126
$ 1,129,381

~~The following is a summary of changes in the accretable discounts of purchased loans during the nine months ended September 30, 2017 and 2016:~~

(dollars in thousands) September 30,
2017 September 30,
2016
Balance, January 1 $ 30,624
$ 33,848
Additions due to acquisitions —
9,991
Accretion (9,023 ) (12,926 )
Accretable discounts removed due to charge-offs (15 ) (161 )
Transfers between non-accretable and accretable discounts, net 923
2,544
Ending balance $ 22,509
$ 33,296

Purchased loan pools are defined as groups of residential mortgage loans that were not acquired in bank acquisitions or FDIC-assisted transactions. As of September 30, 2017, purchased loan pools totaled $465.2 million and consisted of whole-loan, adjustable rate residential mortgages on properties outside the Company’s markets, with principal balances totaling $459.1 million and $6.1 million of remaining purchase premium paid at acquisition. As of December 31, 2016, purchased loan pools totaled $568.3 million with principal balances totaling $559.4 million and $8.9 million of remaining purchase premium paid at acquisition. At September 30, 20172023 and December 31, 2016, one loan in the purchased loan pools with a principal balance of $915,000 and $925,000, respectively, was classified as a troubled debt restructuring and risk-rated grade 40, while all other loans included in the purchased loan pools were performing current loans risk-rated grade 20. During the second quarter of 2017, this troubled debt restructuring defaulted on its restructured terms and was placed on nonaccrual status. At September 30, 2017 and December 31, 2016, the Company had allocated $1.5 million and $1.8 million, respectively, of allowance for loan losses for the purchased loan pools. As part of the due diligence process prior to purchasing an individual mortgage pool, a complete re-underwrite of the individual loan files was conducted. The underwriting process included a review of all income, asset, credit and property related documentation that was used to originate the loan. Underwriters utilized the originating lender’s program guidelines, as well as general prudent mortgage lending standards, to assess each individual loan file. Additional research was conducted to assess the real estate market conditions and market expectations in the geographic areas where a collateral concentration existed. As part of this review, an automated valuation model was employed to provide current collateral valuations and to support individual loan-to-value ratios. Additionally, a sample of site inspections was completed to provide further assurance. The results of the due diligence review were evaluated by officers of the Company in order to determine overall conformance to the Bank’s credit and lending policies.2022.

Nonaccrual and Past-Due Loans

A loan is placed on nonaccrual status when, in management’s judgment, the collection of the interest income appears doubtful. Interest receivable that has been accrued and is subsequently determined to have doubtful collectability is charged ~~against~~to interest income. Interest on loans that are classified as nonaccrual is subsequently applied to principal until the loans are returned to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Past-due loans are loans whose principal or interest is past due 30 days or more. In some cases, where borrowers are experiencing financial difficulties, loans may be restructured to provide terms significantly different from the original contractual terms.

~~The following table presents an analysis of loans accounted for on a nonaccrual basis, excluding purchased loans:~~

(dollars in thousands) September 30,
2017 December 31,
2016
Commercial, financial and agricultural $ 2,409
$ 1,814
Real estate – construction and development 735
547
Real estate – commercial and farmland 5,705
8,757
Real estate – residential 5,984
6,401
Consumer installment 492
595
$ 15,325
$ 18,114

~~The following table presents an analysis of purchased loans accounted for on a nonaccrual basis:~~

(dollars in thousands) September 30,
2017 December 31,
2016
Commercial, financial and agricultural $ 2,086
$ 692
Real estate – construction and development 3,255
2,611
Real estate – commercial and farmland 6,974
10,174
Real estate – residential 6,646
9,476
Consumer installment 88
13
$ 19,049
$ 22,966

~~The following table presents an analysis of past-due loans, excluding purchased past-due loans as of September 30, 2017 and December 31, 2016:~~

(dollars in thousands)
Loans
30-59
Days Past
Due

Loans
60-89
Days
Past Due

Loans 90
or More
Days Past
Due

Total
Loans
Past Due

Current
Loans

Total
Loans

Loans 90
Days or
More Past
Due and
Still
Accruing
September 30, 2017

Commercial, financial and agricultural $ 5,388
$ 2,488
$ 5,025
$ 12,901
$ 1,294,308
$ 1,307,209
$ 2,941
Real estate – construction and development 341
52
517
910
549,279
550,189
—
Real estate – commercial and farmland 2,369
1,097
5,203
8,669
1,550,213
1,558,882
—
Real estate – residential 3,293
1,938
4,165
9,396
959,893
969,289
—
Consumer installment loans 1,034
408
338
1,780
181,534
183,314
—
Other —
—
—
—
5,795
5,795
—
Total $ 12,425
$ 5,983
$ 15,248
$ 33,656
$ 4,541,022
$ 4,574,678
$ 2,941

December 31, 2016

Commercial, financial and agricultural $ 565
$ 82
$ 1,293
$ 1,940
$ 965,198
$ 967,138
$ —
Real estate – construction and development 908
446
439
1,793
361,252
363,045
—
Real estate – commercial and farmland 6,329
1,711
6,945
14,985
1,391,234
1,406,219
—
Real estate – residential 6,354
1,282
5,302
12,938
768,080
781,018
—
Consumer installment loans 624
263
350
1,237
95,678
96,915
—
Other —
—
—
—
12,486
12,486
—
Total $ 14,780
$ 3,784
$ 14,329
$ 32,893
$ 3,593,928
$ 3,626,821
$ —

~~The following table presents an analysis of purchased past-due loans as of September 30, 2017 and December 31, 2016:~~

(dollars in thousands)
Loans
30-59
Days Past
Due

Loans
60-89
Days
Past Due

Loans 90
or More
Days Past
Due

Total
Loans
Past Due

Current
Loans

Total
Loans

Loans 90
Days or
More Past
Due and
Still
Accruing
September 30, 2017

Commercial, financial and agricultural $ 2,674
$ 2
$ 288
$ 2,964
$ 77,931
$ 80,895
$ —
Real estate – construction and development 1,221
935
1,713
3,869
64,714
68,583
—
Real estate – commercial and farmland 2,842
1,318
1,823
5,983
494,186
500,169
—
Real estate – residential 3,308
440
3,435
7,183
257,129
264,312
—
Consumer installment loans 1
4
43
48
3,119
3,167
—
Total $ 10,046
$ 2,699
$ 7,302
$ 20,047
$ 897,079
$ 917,126
$ —

December 31, 2016

Commercial, financial and agricultural $ 113
$ 18
$ 593
$ 724
$ 95,813
$ 96,537
$ —
Real estate – construction and development 161
11
2,518
2,690
78,678
81,368
—
Real estate – commercial and farmland 2,034
326
7,152
9,512
566,843
576,355
—
Real estate – residential 4,566
698
6,835
12,099
298,178
310,277
—
Consumer installment loans 22
—
13
35
4,619
4,654
—
Total $ 6,896
$ 1,053
$ 17,111
$ 25,060
$ 1,044,131
$ 1,069,191
$ —

~~Impaired Loans~~

Loans are considered impaired when, based on current information and events, it is probable the Company will be unable to collect all amounts due in accordance with the original contractual terms of the loan agreements. Impaired loans include loans on nonaccrual status and accruing troubled debt restructurings. When determining if the Company will be unable to collect all principal and interest payments due in accordance with the contractual terms of the loan agreement, the Company considers the borrower’s capacity to pay, which includes such factors as the borrower’s current financial statements, an analysis of global cash flow sufficient to pay all debt obligations and an evaluation of secondary sources of repayment, such as guarantor support and collateral value. The Company individually assesses for impairment all nonaccrual loans greater than $100,000 and all troubled debt restructurings greater than $100,000 (including all troubled debt restructurings, whether or not currently classified as such). The tables below include all loans deemed impaired, whether or not individually assessed for impairment. If a loan is deemed impaired, a specific valuation allowance is allocated, if necessary, so that the loan is reported net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Interest payments on impaired loans are typically applied to principal unless collectability of the principal amount is reasonably assured, in which case interest is recognized on a cash basis.

~~The following is a summary of information pertaining to impaired loans, excluding purchased loans:~~

As of and for the Period Ended
(dollars in thousands) September 30,
2017 December 31,
2016 September 30,
2016
Nonaccrual loans $ 15,325
$ 18,114
$ 16,570
Troubled debt restructurings not included above 12,452
14,209
14,013
Total impaired loans $ 27,777
$ 32,323
$ 30,583

Quarter-to-date interest income recognized on impaired loans $ 297
$ 225
$ 252
Year-to-date interest income recognized on impaired loans $ 857
$ 1,033
$ 808
Quarter-to-date foregone interest income on impaired loans $ 233
$ 267
$ 239
Year-to-date foregone interest income on impaired loans $ 753
$ 977
$ 710

~~The following table presents an analysis of information pertaining to impaired loans, excluding purchased loans as of September 30, 2017, December 31, 2016 and September 30, 2016:~~

(dollars in thousands)
Unpaid
Contractual
Principal
Balance

Recorded
Investment
With No
Allowance

Recorded
Investment
With
Allowance

Total
Recorded
Investment

Related
Allowance

Three
Month
Average
Recorded
Investment
Nine
Month
Average
Recorded
Investment
September 30, 2017

Commercial, financial and agricultural $ 2,924
$ 1,121
$ 1,331
$ 2,452
$ 379
$ 2,478
$ 2,380
Real estate – construction and development 1,655
532
627
1,159
81
1,179
1,160
Real estate – commercial and farmland 11,451
536
9,938
10,474
806
10,669
11,416
Real estate – residential 15,211
4,558
8,636
13,194
1,058
13,683
14,814
Consumer installment loans 538
498
—
498
—
507
554
Total $ 31,779
$ 7,245
$ 20,532
$ 27,777
$ 2,324
$ 28,516
$ 30,324

(dollars in thousands)
Unpaid
Contractual
Principal
Balance

Recorded
Investment
With No
Allowance

Recorded
Investment
With
Allowance

Total
Recorded
Investment

Related
Allowance

Three
Month
Average
Recorded
Investment

Twelve
Month
Average
Recorded
Investment
December 31, 2016

Commercial, financial and agricultural $ 3,068
$ 204
$ 1,656
$ 1,860
$ 134
$ 1,613
$ 1,684
Real estate – construction and development 2,047
—
1,233
1,233
273
1,590
2,018
Real estate – commercial and farmland 13,906
6,811
6,065
12,876
1,503
12,948
12,845
Real estate – residential 15,482
2,238
13,503
15,741
3,080
15,525
14,453
Consumer installment loans 671
—
613
613
5
576
506
Total $ 35,174
$ 9,253
$ 23,070
$ 32,323
$ 4,995
$ 32,252
$ 31,506

(dollars in thousands)
Unpaid
Contractual
Principal
Balance

Recorded
Investment
With No
Allowance

Recorded
Investment
With
Allowance

Total
Recorded
Investment

Related
Allowance

Three
Month
Average
Recorded
Investment
Nine
Month
Average
Recorded
Investment
September 30, 2016

Commercial, financial and agricultural $ 2,568
$ 252
$ 1,114
$ 1,366
$ 118
$ 1,736
$ 1,640
Real estate – construction and development 2,972
—
1,946
1,946
537
2,001
2,214
Real estate – commercial and farmland 14,015
5,499
7,520
13,019
873
12,776
12,837
Real estate – residential 14,350
2,046
11,667
13,713
2,648
13,686
13,516
Consumer installment loans 586
—
539
539
6
492
479
Total $ 34,491
$ 7,797
$ 22,786
$ 30,583
$ 4,182
$ 30,691
$ 30,686

~~The following is a summary of information pertaining to purchased impaired loans:~~

As of and for the Period Ended
(dollars in thousands) September 30,
2017 December 31,
2016 September 30,
2016
Nonaccrual loans $ 19,049
$ 22,966
$ 23,827
Troubled debt restructurings not included above 20,205
23,543
21,117
Total impaired loans $ 39,254
$ 46,509
$ 44,944

Quarter-to-date interest income recognized on impaired loans $ 493
$ 377
$ 1,493
Year-to-date interest income recognized on impaired loans $ 1,246
$ 2,755
$ 2,378
Quarter-to-date foregone interest income on impaired loans $ 356
$ 354
$ 346
Year-to-date foregone interest income on impaired loans $ 958
$ 1,637
$ 1,283

~~The following table presents an analysis of information pertaining to purchased impaired loans as of September 30, 2017, December 31, 2016 and September 30, 2016:~~

(dollars in thousands)
Unpaid
Contractual
Principal
Balance

Recorded
Investment
With No
Allowance

Recorded
Investment
With
Allowance

Total
Recorded
Investment

Related
Allowance

Three
Month
Average
Recorded
Investment
Nine
Month
Average
Recorded
Investment
September 30, 2017

Commercial, financial and agricultural $ 5,333
$ 345
$ 1,741
$ 2,086
$ 800
$ 1,128
$ 831
Real estate – construction and development 9,268
1,189
3,088
4,277
537
3,885
3,807
Real estate – commercial and farmland 16,492
1,516
11,766
13,282
1,140
13,658
16,063
Real estate – residential 22,462
7,224
12,297
19,521
762
20,088
21,308
Consumer installment loans 97
88
—
88
—
58
40
Total $ 53,652
$ 10,362
$ 28,892
$ 39,254
$ 3,239
$ 38,817
$ 42,049

(dollars in thousands)
Unpaid
Contractual
Principal
Balance

Recorded
Investment
With No
Allowance

Recorded
Investment
With
Allowance

Total
Recorded
Investment

Related
Allowance

Three
Month
Average
Recorded
Investment

Twelve
Month
Average
Recorded
Investment
December 31, 2016

Commercial, financial and agricultural $ 5,031
$ 370
$ 322
$ 692
$ —
$ 783
$ 2,206
Real estate – construction and development 24,566
493
3,477
3,970
153
3,888
4,279
Real estate – commercial and farmland 36,174
3,598
15,036
18,634
385
17,806
19,872
Real estate – residential 27,022
7,883
15,306
23,189
1,088
23,201
23,163
Consumer installment loans 37
24
—
24
—
51
96
Total $ 92,830
$ 12,368
$ 34,141
$ 46,509
$ 1,626
$ 45,729
$ 49,616

(dollars in thousands)
Unpaid
Contractual
Principal
Balance

Recorded
Investment
With No
Allowance

Recorded
Investment
With
Allowance

Total
Recorded
Investment

Related
Allowance

Three
Month
Average
Recorded
Investment
Nine
Month
Average
Recorded
Investment
September 30, 2016

Commercial, financial and agricultural $ 5,097
$ 648
$ 225
$ 873
$ —
$ 838
$ 2,251
Real estate – construction and development 24,253
296
3,509
3,805
184
3,946
4,075
Real estate – commercial and farmland 41,098
1,861
15,116
16,977
402
18,196
19,569
Real estate – residential 26,908
7,473
15,740
23,213
935
23,103
22,893
Consumer installment loans 98
76
—
76
—
80
105
Total $ 97,454
$ 10,354
$ 34,590
$ 44,944
$ 1,521
$ 46,163
$ 48,893

~~Credit Quality Indicators~~

~~The Company uses a nine category risk grading system to assign a risk grade to each loan in the portfolio. The following is a description of the general characteristics of the grades:~~

~~Grade 10 – Prime Credit~~ ~~– This grade represents loans to the Company’s most creditworthy borrowers or loans that are secured by cash or cash equivalents.~~

~~Grade 15 – Good Credit~~ – This grade includes loans that exhibit one or more characteristics better than that of a Satisfactory Credit. Generally, the debt service coverage and borrower’s liquidity is materially better than required by the Company’s loan policy.

~~Grade 20 – Satisfactory Credit~~ ~~– This grade is assigned to loans to borrowers who exhibit satisfactory credit histories, contain acceptable loan structures and demonstrate ability to repay.~~

~~Grade 23 – Performing, Under-Collateralized Credit~~ – This grade is assigned to loans that are currently performing and supported by adequate financial information that reflects repayment capacity but exhibits a loan-to-value ratio greater than 110%, based on a documented collateral valuation.

~~Grade 25 – Minimum Acceptable Credit~~ – This grade includes loans which exhibit all the characteristics of a Satisfactory Credit, but warrant more than normal level of banker supervision due to (i) circumstances which elevate the risks of performance (such as start-up operations, untested management, heavy leverage and interim losses); (ii) adverse, extraordinary events that have affected, or could affect, the borrower’s cash flow, financial condition, ability to continue operating profitability or refinancing (such as death of principal, fire and divorce); (iii) loans that require more than the normal servicing requirements (such as any type of construction financing, acquisition and development loans, accounts receivable or inventory loans and floor plan loans); (iv) existing technical exceptions which raise some doubts about the Bank’s perfection in its collateral position or the continued financial capacity of the borrower; or (v) improvements in formerly criticized borrowers, which may warrant banker supervision.

~~Grade 30 – Other Asset Especially Mentioned~~ – This grade includes loans that exhibit potential weaknesses that deserve management’s close attention. If left uncorrected, these weaknesses may result in deterioration of the repayment prospects for the asset or in the Company’s credit position at some future date.

~~Grade 40 – Substandard~~ – This grade represents loans which are inadequately protected by the current credit worthiness and paying capacity of the borrower or of the collateral pledged, if any. These assets exhibit a well-defined weakness or are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. These weaknesses may be characterized by past due performance, operating losses or questionable collateral values.

~~Grade 50 – Doubtful~~ – This grade includes loans which exhibit all of the characteristics of a substandard loan with the added provision that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable or improbable.

~~Grade 60 – Loss~~ – This grade is assigned to loans which are considered uncollectible and of such little value that their continuance as active assets of the Bank is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing it off.

~~The following table presents the loan portfolio, excluding purchased loans, by risk grade as of September 30, 2017 and December 31, 2016 (in thousands):~~

Risk
Grade Commercial,
Financial and
Agricultural Real Estate -
Construction and
Development Real Estate -
Commercial and
Farmland Real Estate -
Residential Consumer
Installment
Loans Other Total
September 30, 2017
10 $ 495,116
$ —
$ 6,029
$ 49
$ 9,068
$ —
$ 510,262
15 559,781
959
75,462
55,759
256
—
692,217
20 117,904
48,640
1,005,945
800,557
24,332
5,795
2,003,173
23 343
4,403
4,242
5,986
3
—
14,977
25 121,558
488,956
431,862
86,702
148,891
—
1,277,969
30 8,350
4,458
17,568
5,674
93
—
36,143
40 4,150
2,773
17,774
14,562
671
—
39,930
50 7
—
—
—
—
—
7
60 —
—
—
—
—
—
—
Total $ 1,307,209
$ 550,189
$ 1,558,882
$ 969,289
$ 183,314
$ 5,795
$ 4,574,678

December 31, 2016
10 $ 397,093
$ —
$ 8,814
$ 125
$ 8,532
$ —
$ 414,564
15 376,323
5,390
102,893
54,136
405
—
539,147
20 97,057
36,307
889,539
609,583
25,026
12,486
1,669,998
23 366
6,803
8,533
7,470
14
—
23,186
25 92,066
307,903
357,151
88,370
62,098
—
907,588
30 144
719
22,986
5,197
126
—
29,172
40 4,089
5,923
16,303
16,038
714
—
43,067
50 —
—
—
99
—
—
99
60 —
—
—
—
—
—
—
Total $ 967,138
$ 363,045
$ 1,406,219
$ 781,018
$ 96,915
$ 12,486
$ 3,626,821

~~The following table presents the purchased loan portfolio by risk grade as of September 30, 2017 and December 31, 2016 (in thousands):~~

Risk
Grade

Commercial,
Financial and
Agricultural

Real Estate -
Construction and
Development

Real Estate -
Commercial and
Farmland

Real Estate -
Residential

Consumer
Installment
Loans
Other Total
September 30, 2017
10 $ 3,377
$ —
$ —
$ —
$ 662
$ —
$ 4,039
15 4,969
—
5,327
96,570
231
—
107,097
20 9,497
13,548
198,960
52,646
1,204
—
275,855
23 —
2,302
6,936
10,621
—
—
19,859
25 47,822
40,500
243,216
79,374
864
—
411,776
30 12,817
7,617
22,829
7,378
55
—
50,696
40 2,413
4,616
22,901
17,723
151
—
47,804
50 —
—
—
—
—
—
—
60 —
—
—
—
—
—
—
Total $ 80,895
$ 68,583
$ 500,169
$ 264,312
$ 3,167
$ —
$ 917,126

December 31, 2016
10 $ 5,722
$ —
$ —
$ —
$ 814
$ —
$ 6,536
15 1,266
—
7,619
31,331
570
—
40,786
20 16,204
10,686
194,168
111,712
1,583
—
334,353
23 22
3,643
9,019
14,791
—
—
27,475
25 67,123
56,006
323,242
121,379
1,276
—
569,026
30 5,072
7,271
15,039
7,605
45
—
35,032
40 1,128
3,762
27,268
23,459
366
—
55,983
50 —
—
—
—
—
—
—
60 —
—
—
—
—
—
—
Total $ 96,537
$ 81,368
$ 576,355
$ 310,277
$ 4,654
$ —
$ 1,069,191

~~Troubled Debt Restructurings~~

The restructuring of a loan is considered a “troubled debt restructuring” if both (i) the borrower is experiencing financial difficulties and (ii) the Company has granted a concession. Concessions may include interest rate reductions to below market interest rates, principal forgiveness, restructuring amortization schedules and other actions intended to minimize potential losses. The Company has exhibited the greatest success for rehabilitation of the loan by a reduction in the rate alone (maintaining the amortization of the debt) or a combination of a rate reduction and the forbearance of previously past due interest or principal. This has most typically been evidenced in certain commercial real estate loans whereby a disruption in the borrower’s cash flow resulted in an extended past due status, of which the borrower was unable to catch up completely as the cash flow of the property ultimately stabilized at a level lower than its original level. A reduction in rate, coupled with a forbearance of unpaid principal and/or interest, allowed the net cash flows to service the debt under the modified terms.

The Company’s policy requires a restructure request to be supported by a current, well-documented credit evaluation of the borrower’s financial condition and a collateral evaluation that is no older than six months from the date of the restructure. Key factors of that evaluation include the documentation of current, recurring cash flows, support provided by the guarantor(s) and the current valuation of the collateral. If the appraisal in the file is older than six months, an evaluation must be made as to the continued reasonableness of the valuation. For certain income-producing properties, current rent rolls and/or other income information can be utilized to support the appraisal valuation, when coupled with documented cap rates within our markets and a physical inspection of the collateral to validate the current condition.

The Company’s policy states that in the event a loan has been identified as a troubled debt restructuring, it should be assigned a grade of substandard and placed on nonaccrual status until such time the borrower has demonstrated the ability to service the loan payments based on the restructured terms – generally defined as six months of satisfactory payment history. Missed payments under the original loan terms are not considered under the new structure; however, subsequent missed payments are considered non-performance and are not considered toward the six month required term of satisfactory payment history. The Company’s loan policy states that a nonaccrual loan may be returned to accrual status when (i) none of its principal and interest is due and unpaid, and the Company expects repayment of the remaining contractual principal and interest, or (ii) it otherwise becomes well secured and in the process of collection. Restoration to accrual status on any given loan must be supported by a well-documented credit evaluation of the borrower’s financial condition and the prospects for full repayment, ~~and~~ approved by the Company’s Chief Credit Officer.

Past-due loans are loans whose principal or interest is past due 30 days or more. In ~~the normal course of business, the Company renews loans with a modification of the interest rate or terms that~~some cases, where borrowers are ~~not deemed as troubled debt restructurings because the borrower is not~~ experiencing financial ~~difficulty. The Company modified~~difficulties, loans inmay be restructured to provide terms significantly different from the ~~first nine months of 2017 and 2016 totaling $36.6 million and $58.2 million, respectively, under such parameters.~~original contractual terms.

As of September 30, 2017 and December 31, 2016, the Company had a balance of $14.2 million and $18.2 million, respectively, in troubled debt restructurings, excluding purchased loans. The Company has recorded $2.8 million and $1.2 million in previous charge-offs on such loans at September 30, 2017 and December 31, 2016, respectively. The Company’s balance in the allowance for loan losses allocated to such troubled debt restructurings was $1.2 million and $3.1 million at September 30, 2017 and December 31, 2016, respectively. At September 30, 2017, the Company did not have any commitments to lend additional funds to debtors whose terms have been modified in troubled restructurings.

During the nine months ended September 30, 2017 and 2016, the Company modified loans as troubled debt restructurings, excluding purchased loans, with principal balances of $783,000 and $2.9 million, respectively, and these modifications did not have a material impact on the Company’s allowance for loan loss. The following table presents the loans by class modified as troubled debt restructurings, excluding purchased loans, which occurred during the nine months ended September 30, 2017 and 2016:

September 30, 2017 September 30, 2016
Loan Class #
Balance
(in thousands)
#
Balance
(in thousands)
Commercial, financial and agricultural 1 $ 4
5 $ 59
Real estate – construction and development — —
2 251
Real estate – commercial and farmland 2 226
4 1,658
Real estate – residential 10 526
7 887
Consumer installment 6 27
9 44
Total 19 $ 783
27 $ 2,899

Troubled debt restructurings, excluding purchased loans, with an outstanding balance of $1.2 million and $793,000 defaulted during the nine months ended September 30, 2017 and 2016, respectively, and these defaults did not have a material impact on the Company’s allowance for loan loss. The following table presents for loans, excluding purchased loans, the troubled debt restructurings by class that defaulted (defined as 30 days past due) during the nine months ended September 30, 2017 and 2016:

September 30, 2017 September 30, 2016
Loan Class #
Balance
(in thousands)
#
Balance
(in thousands)
Commercial, financial and agricultural 4 $ 58
5 $ 51
Real estate – construction and development 1 25
— —
Real estate – commercial and farmland 4 200
5 517
Real estate – residential 12 878
3 219
Consumer installment 7 25
2 6
Total 28 $ 1,186
15 $ 793

The following table presents ~~the amount~~an analysis of ~~troubled debt restructurings by loan class, excluding purchased~~ loans ~~classified separately as accrual~~accounted for on a nonaccrual basis:


(dollars in thousands)	June 30, 2023		December 31, 2022
Commercial, financial and agricultural	$	8,774	$	11,094
Consumer	235		420
Indirect automobile	318		346



Real estate – construction and development	447		523
Real estate – commercial and farmland	10,657		13,203
Real estate – residential(1)	106,249		109,222
	$	126,680	$	134,808

(1) Included in real estate - residential were $69.7 million and $69.6 million of serviced GNMA-guaranteed nonaccrual loans at ~~September~~June 30, ~~2017~~2023 and December 31, ~~2016:~~ 2022, respectively.

September 30, 2017 Accruing Loans Non-Accruing Loans
Loan Class #
Balance
(in thousands)
#
Balance
(in thousands)
Commercial, financial and agricultural 4 $ 44
13 $ 129
Real estate – construction and development 7 424
2 34
Real estate – commercial and farmland 16 4,769
5 210
Real estate – residential 78 7,209
16 1,212
Consumer installment 4 6
36 130
Total 109 $ 12,452
72 $ 1,715

December 31, 2016 Accruing Loans Non-Accruing Loans
Loan Class #
Balance
(in thousands)
#
Balance
(in thousands)
Commercial, financial and agricultural 4 $ 47
15 $ 114
Real estate – construction and development 8 686
2 34
Real estate – commercial and farmland 16 4,119
5 2,970
Real estate – residential 82 9,340
15 739
Consumer installment 7 17
32 130
Total 117 $ 14,209
69 $ 3,987

~~As of September 30, 2017 and December 31, 2016,~~There was no interest income recognized on nonaccrual loans during the Company had a balance of $26.0 million and $28.1 million, respectively, in troubled debt restructurings included in purchased loans. The Company has recorded $1.5 million in previous charge-offs on such loans at both September 30, 2017 and December 31, 2016. At September 30, 2017, the Company did not have any commitments to lend additional funds to debtors whose terms have been modified in troubled restructurings.

~~During the nine~~six months ended ~~September~~June 30, ~~2017~~2023 and 2016, the Company modified purchased loans as troubled debt restructurings, with principal balances of $1.0 million and $1.9 million, respectively, and these modifications did not have a material impact on the Company’s allowance for loan loss. The following table presents the purchased loans by class modified as troubled debt restructurings, which occurred during the nine months ended September 30, 2017 and 2016: 2022.

September 30, 2017 September 30, 2016
Loan Class #
Balance
(in thousands)
#
Balance
(in thousands)
Commercial, financial and agricultural — $ —
1 $ 76
Real estate – construction and development — —
— —
Real estate – commercial and farmland — —
3 708
Real estate – residential 8 1,005
8 1,130
Consumer installment — —
— —
Total 8 $ 1,005
12 $ 1,914

Troubled debt restructurings included in purchased loans with an outstanding balance of $2.3 million and $733,000 defaulted during the nine months ended September 30, 2017 and 2016, respectively, and these defaults did not have a material impact on the Company’s allowance for loan loss.

The following table presents ~~purchased loan troubled debt restructurings by class that defaulted (defined as 30 days past due) during the nine months ended September 30, 2017 and 2016:~~an analysis of nonaccrual loans with no related allowance for credit losses:

September 30, 2017 September 30, 2016
Loan Class #
Balance
(in thousands)
#
Balance
(in thousands)
Commercial, financial and agricultural 1 $ 5
2 $ 76
Real estate – construction and development — —
1 10
Real estate – commercial and farmland 5 1,945
1 207
Real estate – residential 7 333
11 440
Consumer installment 1 3
— —
Total 14 $ 2,286
15 $ 733


(dollars in thousands)	June 30, 2023		December 31, 2022
Commercial, financial and agricultural	$	1,344	$	33






Real estate – commercial and farmland	7,997		1,464
Real estate – residential	61,573		58,734
	$	70,914	$	60,231

The following table presents ~~the amount~~an analysis of ~~troubled debt restructurings by loan class~~past-due loans as of ~~purchased loans, classified separately as accrual and nonaccrual at September~~June 30, ~~2017~~2023 and December 31, ~~2016.~~ 2022:


(dollars in thousands)	Loans 30-59 Days Past Due		Loans 60-89 Days Past Due		Loans 90 or More Days Past Due		Total Loans Past Due		Current Loans		Total Loans		Loans 90 Days or More Past Due and Still Accruing
June 30, 2023
Commercial, financial and agricultural	$	12,380	$	5,976	$	10,370	$	28,726	$	2,690,105	$	2,718,831	$	4,385
Consumer	5,111		815		435		6,361		301,125		307,486		331
Indirect automobile	138		49		136		323		62,908		63,231		—
Mortgage warehouse	—		—		—		—		1,147,413		1,147,413		—
Municipal	—		—		—		—		510,410		510,410		—
Premium finance	6,795		9,087		8,387		24,269		964,462		988,731		8,387
Real estate – construction and development	1,061		19		764		1,844		2,215,900		2,217,744		321
Real estate – commercial and farmland	2,782		2,883		7,755		13,420		7,802,359		7,815,779		—
Real estate – residential	31,604		12,691		102,664		146,959		4,555,175		4,702,134		—
Total	$	59,871	$	31,520	$	130,511	$	221,902	$	20,249,857	$	20,471,759	$	13,424

December 31, 2022
Commercial, financial and agricultural	$	16,219	$	5,451	$	11,632	$	33,302	$	2,646,101	$	2,679,403	$	3,267
Consumer	2,539		3,163		741		6,443		377,594		384,037		472
Indirect automobile	466		77		267		810		107,838		108,648		—
Mortgage warehouse	—		—		—		—		1,038,924		1,038,924		—
Municipal	—		—		—		—		509,151		509,151		—
Premium finance	13,859		10,620		13,626		38,105		985,374		1,023,479		13,626
Real estate – construction and development	25,367		3,829		966		30,162		2,056,276		2,086,438		500
Real estate – commercial and farmland	1,738		168		10,223		12,129		7,592,738		7,604,867		—
Real estate – residential	35,015		11,329		106,170		152,514		4,267,792		4,420,306		—
Total	$	95,203	$	34,637	$	143,625	$	273,465	$	19,581,788	$	19,855,253	$	17,865

Collateral-Dependent Loans

Collateral-dependent loans are loans where repayment is expected to be provided substantially through the operation or sale of the collateral when the borrower is experiencing financial difficulty. If the Company determines that foreclosure is probable, these loans are written down to the lower of cost or fair value of the collateral less estimated costs to sell. When repayment is expected to be from the operation of the collateral, the allowance for credit losses is calculated as the amount by which the amortized cost basis of the financial asset exceeds the present value of expected cash flows from the operation of the collateral. The Company may, in the alternative, measure the allowance for credit loss as the amount by which the amortized cost basis of the financial asset exceeds the estimated fair value of the collateral.

September 30, 2017 Accruing Loans Non-Accruing Loans
Loan Class #
Balance
(in thousands)
#
Balance
(in thousands)
Commercial, financial and agricultural — $ —
3 $ 18
Real estate – construction and development 3 1,022
6 349
Real estate – commercial and farmland 15 6,308
11 3,834
Real estate – residential 119 12,875
25 1,627
Consumer installment — —
2 6
Total 137 $ 20,205
47 $ 5,834

The following table presents an analysis of individually evaluated collateral-dependent financial assets and related allowance for credit losses:


	June 30, 2023				December 31, 2022
(dollars in thousands)	Balance		Allowance for Credit Losses		Balance		Allowance for Credit Losses
Commercial, financial and agricultural	$	3,941	$	670	$	7,128	$	6,294


Mortgage warehouse	—		—		—		—

Premium finance	736		—		3,233		—
Real estate – construction and development	601		94		780		13
Real estate – commercial and farmland	9,139		286		15,168		1,428
Real estate – residential	18,437		4,902		15,464		2,066
	$	32,854	$	5,952	$	41,773	$	9,801

Credit Quality Indicators

The Company uses a nine category risk grading system to assign a risk grade to each loan in the portfolio. The following is a description of the general characteristics of the grades:

Pass (Grades 1 - 5) – These grades represent acceptable credit risk to the Company based on factors including creditworthiness of the borrower, current performance and nature of the collateral.

Other Assets Especially Mentioned (Grade 6) – This grade includes loans that exhibit potential weaknesses that deserve management’s close attention. If left uncorrected, these weaknesses may result in deterioration of the repayment prospects for the asset or in the Company’s credit position at some future date.

Substandard(Grade 7) – This grade represents loans which are inadequately protected by the current credit worthiness and paying capacity of the borrower or of the collateral pledged, if any. These assets exhibit a well-defined weakness or are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. These weaknesses may be characterized by past due performance, operating losses or questionable collateral values.

Doubtful (Grade 8) – This grade includes loans which exhibit all of the characteristics of a substandard loan with the added provision that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable or improbable.

Loss (Grade 9) – This grade is assigned to loans which are considered uncollectible and of such little value that their continuance as active assets of the Bank is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing it off.

The following tables present the loan portfolio's amortized cost by class of financing receivable, risk grade and year of origination (in thousands) as of June 30, 2023 and December 31, 2022. Generally, current period renewals of credit are underwritten again at the point of renewal and considered current period originations for purposes of the tables below. The Company had an immaterial amount of revolving loans which converted to term loans and the amortized cost basis of those loans is included in the applicable origination year. There were no loans risk graded 8 or 9 at June 30, 2023 or December 31, 2022.

December 31, 2016 Accruing Loans Non-Accruing Loans
Loan Class #
Balance
(in thousands)
#
Balance
(in thousands)
Commercial, financial and agricultural 1 $ 1
4 $ 91
Real estate – construction and development 6 1,358
3 30
Real estate – commercial and farmland 20 8,460
5 2,402
Real estate – residential 123 13,713
33 2,077
Consumer installment 3 11
1 —
Total 153 $ 23,543
46 $ 4,600


As of June 30, 2023	Term Loans by Origination Year												Revolving Loans Amortized Cost Basis
	2023		2022		2021		2020		2019		Prior				Total

Commercial, Financial and Agricultural
Risk Grade:
Pass	$	546,295	$	919,283	$	454,312	$	133,061	$	79,731	$	67,945	$	496,253		$	2,696,880
6	25		608		75		118		163		2,301		913			4,203
7	3,548		2,233		2,561		1,185		3,079		2,895		2,247			17,748


Total commercial, financial and agricultural	$	549,868	$	922,124	$	456,948	$	134,364	$	82,973	$	73,141	$	499,413		$	2,718,831

Current-period gross charge offs	978		12,715		7,700		961		610		2,560		25			25,549
Consumer
Risk Grade:
Pass	$	29,695	$	23,736	$	8,734	$	31,252	$	19,417	$	25,483	$	167,962		$	306,279
6	—		7		—		1		—		93		198			299
7	12		111		39		99		98		463		86			908


Total consumer	$	29,707	$	23,854	$	8,773	$	31,352	$	19,515	$	26,039	$	168,246		$	307,486

Current-period gross charge offs	2		222		50		1,076		671		968		203			3,192
Indirect Automobile
Risk Grade:
Pass	$	—	$	—	$	—	$	—	$	8,614	$	54,028	$	—		$	62,642
6	—		—		—		—		—		2		—			2
7	—		—		—		—		35		552		—			587


Total indirect automobile	$	—	$	—	$	—	$	—	$	8,649	$	54,582	$	—		$	63,231

Current-period gross charge offs	—		—		—		—		—		99		—			99
Mortgage Warehouse
Risk Grade:
Pass	$	—	$	—	$	—	$	—	$	—	$	—	$	1,064,769		$	1,064,769
6	—		—		—		—		—		—		82,644			82,644
7	—		—		—		—		—		—		—			—


Total mortgage warehouse	$	—	$	—	$	—	$	—	$	—	$	—	$	1,147,413		$	1,147,413

Current-period gross charge offs	—		—		—		—		—		—		—			—
Municipal
Risk Grade:
Pass	$	2,569	$	25,452	$	54,458	$	184,799	$	15,112	$	228,020	$	—		$	510,410




Total municipal	$	2,569	$	25,452	$	54,458	$	184,799	$	15,112	$	228,020	$	—		$	510,410

Current-period gross charge offs	—		—		—		—		—		—		—			—
Premium Finance
Risk Grade:
Pass	$	797,510	$	178,702	$	4,132	$	—	$	—	$	—	$	—		$	980,344

7	1,621		6,766		—		—		—		—		—			8,387


Total premium finance	$	799,131	$	185,468	$	4,132	$	—	$	—	$	—	$	—		$	988,731

Current-period gross charge offs	4		2,955		310		—		—		—		—			3,269


As of June 30, 2023	Term Loans by Origination Year												Revolving Loans Amortized Cost Basis
	2023		2022		2021		2020		2019		Prior				Total

Real Estate – Construction and Development
Risk Grade:
Pass	$	218,089	$	841,086	$	792,121	$	191,193	$	48,648	$	35,502	$	75,878		$	2,202,517
6	—		—		—		—		—		517		—			517
7	—		592		304		164		—		13,650		—			14,710


Total real estate – construction and development	$	218,089	$	841,678	$	792,425	$	191,357	$	48,648	$	49,669	$	75,878		$	2,217,744

Current-period gross charge offs	—		—		—		—		—		—		—			—
Real Estate – Commercial and Farmland
Risk Grade:
Pass	$	351,788	$	1,807,366	$	1,926,491	$	1,148,117	$	813,499	$	1,556,760	$	99,724		$	7,703,745
6	—		348		—		1,232		30,476		46,854		500			79,410
7	—		198		449		2,651		4,398		24,928		—			32,624


Total real estate – commercial and farmland	$	351,788	$	1,807,912	$	1,926,940	$	1,152,000	$	848,373	$	1,628,542	$	100,224		$	7,815,779

Current-period gross charge offs	—		—		—		—		3,151		169		—			3,320
Real Estate - Residential
Risk Grade:
Pass	$	451,392	$	1,462,604	$	1,181,824	$	525,870	$	253,419	$	466,163	$	245,958		$	4,587,230
6	—		233		142		266		676		2,406		237			3,960
7	809		14,196		21,021		25,900		20,687		26,533		1,798			110,944


Total real estate - residential	$	452,201	$	1,477,033	$	1,202,987	$	552,036	$	274,782	$	495,102	$	247,993		$	4,702,134

Current-period gross charge offs	24		—		9		—		—		105		59			197
Total Loans
Risk Grade:
Pass	$	2,397,338	$	5,258,229	$	4,422,072	$	2,214,292	$	1,238,440	$	2,433,901	$	2,150,544		$	20,114,816
6	25		1,196		217		1,617		31,315		52,173		84,492			171,035
7	5,990		24,096		24,374		29,999		28,297		69,021		4,131			185,908


Total loans	$	2,403,353	$	5,283,521	$	4,446,663	$	2,245,908	$	1,298,052	$	2,555,095	$	2,239,167		$	20,471,759
Total current-period gross charge offs	1,008		15,892		8,069		2,037		4,432		3,901		287			35,626


As of December 31, 2022	Term Loans by Origination Year												Revolving Loans Amortized Cost Basis
	2022		2021		2020		2019		2018		Prior				Total

Commercial, Financial and Agricultural
Risk Grade:
Pass	$	1,127,120	$	526,043	$	174,120	$	109,091	$	56,657	$	41,612	$	621,784		$	2,656,427
6	—		13		94		183		895		1,774		317			3,276
7	8,565		1,214		1,182		3,314		545		2,759		2,121			19,700


Total commercial, financial and agricultural	$	1,135,685	$	527,270	$	175,396	$	112,588	$	58,097	$	46,145	$	624,222		$	2,679,403
Consumer
Risk Grade:
Pass	$	41,487	$	12,692	$	37,906	$	23,454	$	17,144	$	13,825	$	236,113		$	382,621
6	38		—		—		—		—		98		196			332
7	68		62		216		106		118		431		83			1,084


Total consumer	$	41,593	$	12,754	$	38,122	$	23,560	$	17,262	$	14,354	$	236,392		$	384,037
Indirect Automobile
Risk Grade:
Pass	$	—	$	—	$	—	$	11,900	$	50,749	$	45,120	$	—		$	107,769
6	—		—		—		—		—		11		—			11
7	—		—		—		41		149		678		—			868


Total indirect automobile	$	—	$	—	$	—	$	11,941	$	50,898	$	45,809	$	—		$	108,648
Mortgage Warehouse
Risk Grade:
Pass	$	—	$	—	$	—	$	—	$	—	$	—	$	990,106		$	990,106
6	—		—		—		—		—		—		22,831			22,831
7	—		—		—		—		—		—		25,987			25,987


Total mortgage warehouse	$	—	$	—	$	—	$	—	$	—	$	—	$	1,038,924		$	1,038,924
Municipal
Risk Grade:
Pass	$	18,074	$	46,809	$	188,507	$	9,752	$	4,358	$	241,651	$	—		$	509,151




Total municipal	$	18,074	$	46,809	$	188,507	$	9,752	$	4,358	$	241,651	$	—		$	509,151
Premium Finance
Risk Grade:
Pass	$	1,000,214	$	9,667	$	12	$	—	$	—	$	—	$	—		$	1,009,893

7	13,051		535		—		—		—		—		—			13,586


Total premium finance	$	1,013,265	$	10,202	$	12	$	—	$	—	$	—	$	—		$	1,023,479
Real Estate – Construction and Development
Risk Grade:
Pass	$	834,831	$	793,723	$	306,084	$	69,596	$	7,934	$	31,490	$	27,474		$	2,071,132
6	277		—		—		—		173		165		—			615
7	—		783		164		5		13,159		580		—			14,691


Total real estate – construction and development	$	835,108	$	794,506	$	306,248	$	69,601	$	21,266	$	32,235	$	27,474		$	2,086,438


As of December 31, 2022	Term Loans by Origination Year												Revolving Loans Amortized Cost Basis
	2022		2021		2020		2019		2018		Prior				Total

Real Estate – Commercial and Farmland
Risk Grade:
Pass	$	1,739,021	$	1,975,003	$	1,085,086	$	869,116	$	447,311	$	1,259,763	$	110,848		$	7,486,148
6	607		17,974		—		30,841		4,801		18,289		—			72,512
7	387		2,810		3,078		12,007		6,527		21,398		—			46,207


Total real estate – commercial and farmland	$	1,740,015	$	1,995,787	$	1,088,164	$	911,964	$	458,639	$	1,299,450	$	110,848		$	7,604,867
Real Estate - Residential
Risk Grade:
Pass	$	1,524,021	$	1,214,724	$	548,968	$	268,821	$	115,693	$	393,570	$	234,684		$	4,300,481
6	236		145		94		688		364		2,910		600			5,037
7	6,735		21,283		25,860		27,173		14,396		17,665		1,676			114,788


Total real estate - residential	$	1,530,992	$	1,236,152	$	574,922	$	296,682	$	130,453	$	414,145	$	236,960		$	4,420,306
Total Loans
Risk Grade:
Pass	$	6,284,768	$	4,578,661	$	2,340,683	$	1,361,730	$	699,846	$	2,027,031	$	2,221,009		$	19,513,728
6	1,158		18,132		188		31,712		6,233		23,247		23,944			104,614
7	28,806		26,687		30,500		42,646		34,894		43,511		29,867			236,911


Total loans	$	6,314,732	$	4,623,480	$	2,371,371	$	1,436,088	$	740,973	$	2,093,789	$	2,274,820		$	19,855,253

Allowance for ~~Loan~~Credit Losses on Loans

The allowance for ~~loan~~credit losses represents an allowance for ~~probable incurred~~expected losses inover the ~~loan portfolio. The adequacy~~remaining contractual life of the allowance for loan losses is evaluated periodically based on a review of all significant loans, with a particular emphasis on non-accruing, past-due and other loans that management believes might be potentially impairedassets. The contractual term does not consider extensions, renewals or ~~warrant additional attention.~~modifications. The Company segregates the loan portfolio by type of loan and utilizes this segregation in evaluating exposure to risks within the portfolio. In addition, based on internal reviews and external reviews performed by regulatory authorities, the Company further segregates the loan portfolio by loan grades based on an assessment of risk for a particular loan or group of loans. Certain reviewed loans are assigned specific allowances when a review of relevant data determines that a general allocation is not sufficient or when the review affords management the opportunity to adjust the amount of exposure in a given credit. In establishing allowances, management considers historical loan loss experience but adjusts this data with a significant emphasis on current loan quality trends, current economic conditions and other factors in the markets where the Company operates. Factors considered include, among others, current valuations of real estate in the Company’s markets, unemployment rates, the effect of weather conditions on agricultural related entities and other significant local economic events, such as major plant closings.

The Company has developed a methodology for determining the adequacy of the allowance for loan losses which is monitored by the Company’s Chief Credit Officer. Procedures provide for the assignment of a risk rating for every loan included in the total loan portfolio. Mortgage warehouse lines of credit, overdraft protection loans, commercial insurance premium finance loans, and certain consumer and mortgage loans serviced by outside processors are treated as pools for risk rating purposes. The risk rating schedule provides nine ratings of which five ratings are classified as pass ratings and four ratings are classified as criticized ratings. Each risk rating is assigned a percentage factor to be applied to the loan balance to determine the adequate amount of reserve. The Bank’s independent internal loan review department reviews on an annual basis a sample of relationships in excess of $500,000. Sampling is based on a number of factors unique to the Bank’s portfolio risks, including, but not limited to, lending divisions, industry, risk grades, and new originations. As a result of these loan reviews, certain loans may be identified as having deteriorating

credit quality. Other loans that surface as problem loans may also be assigned specific reserves. Past-due loans are assigned risk ratings based on the number of days past due. The calculation of the allowance for loan losses, including underlying data and assumptions, is reviewed regularly by the Company’s Chief Financial Officer and the independent internal loan review department.

Loan losses are charged against the allowance when management believes the collection of a loan’s principal is unlikely. Subsequent recoveries are credited to the allowance. Consumer loans are ~~charged-off~~charged off in accordance with the Federal Financial Institutions Examination Council’s ~~(“FFIEC”~~(the “FFIEC”) Uniform Retail Credit Classification and Account Management Policy. Commercial loans are ~~charged-off~~charged off when they are deemed uncollectible, which usually involves a triggering event within the collection effort. If the loan is collateral dependent, the loss is more easily identified and is ~~charged-off~~charged off when it is identified, usually based upon receipt of an appraisal. However, when a loan has guarantor support, the Company may carry the estimated loss as a reserve against the loan while collection efforts with the guarantor are pursued. If, after collection efforts with the guarantor are complete, the deficiency is still considered uncollectible, the loss is ~~charged-off~~charged off and any further collections are treated as recoveries. In all situations, when a loan is downgraded to an Asset Quality Rating of 609 (Loss per the regulatory guidance), the uncollectible portion is ~~charged-off.~~charged off.

The Company’s methodologies for estimating the allowance for credit losses consider available relevant information about the collectability of cash flows, including information about past events, current conditions, and reasonable and supportable forecasts. The methodologies apply historical loss information, adjusted for asset-specific characteristics, economic conditions at the measurement date, and forecasts about future economic conditions expected to exist through the contractual lives of the financial assets that are reasonable and supportable, to the identified pools of loans with similar risk characteristics for which the historical loss experience was observed. The Company utilizes a one year reasonable and supportable forecast period. The Company’s methodologies revert back to historical loss information on a straight-line basis over four quarters after the reasonable and supportable forecast period.

During the six months ended June 30, 2023, the allowance for credit losses increased due to a decline in forecasted macroeconomic factors, particularly residential and commercial real estate price indices and organic loan growth during the period. The allowance for credit losses was determined at June 30, 2023 using a weighting of two economic forecasts from Moody's in order to align with management's best estimate over the reasonable and supportable forecast period. The Moody's baseline scenario was weighted at 75% and the upside 10th percentile S-1 scenario was weighted at 25%. The allowance for

credit losses was determined at December 31, 2022 solely using the Moody's baseline scenario economic forecast. The current forecast reflects, among other things, declines in forecast levels of home prices and commercial real estate prices compared with the forecast at December 31, 2022.

The following tables detail activity and end of period balances in the allowance for ~~loan~~credit losses by portfolio segment for the ~~three and nine-month~~ periods ~~ended September 30, 2017, the year ended December 31, 2016 and the three and nine-month periods ended September 30, 2016.~~indicated. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.


Three Months Ended June 30, 2023

(dollars in thousands)	Commercial, Financial and Agricultural		Consumer		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance
Balance, March 31, 2023	$	45,238	$	4,893	$	137	$	1,924	$	354	$	893


Provision for loan losses	15,322		1,513		(199)		411		3		51
Loans charged off	(13,316)		(2,052)		(65)		—		—		(1,848)
Recoveries of loans previously charged off	3,545		194		225		—		—		1,680
Balance, June 30, 2023	$	50,789	$	4,548	$	98	$	2,335	$	357	$	776

	Real Estate – Construction and Development		Real Estate – Commercial and Farmland		Real Estate – Residential		Total
Balance, March 31, 2023	$	42,841	$	87,124	$	59,254	$	242,658


Provision for loan losses	11,276		12,275		2,991		43,643
Loans charged off	—		(3,320)		(69)		(20,670)
Recoveries of loans previously charged off	472		61		263		6,440
Balance, June 30, 2023	$	54,589	$	96,140	$	62,439	$	272,071

Six Months Ended June 30, 2023

(dollars in thousands)	Commercial, Financial and Agricultural		Consumer Installment		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance
Balance, December 31, 2022	$	39,455	$	5,413	$	174	$	2,118	$	357	$	1,025
Adjustment to allowance for adoption of ASU 2022-02	(105)		—		—		—		—		—

Provision for loan losses	31,400		1,836		(418)		217		—		(42)
Loans charged off	(25,549)		(3,192)		(99)		—		—		(3,269)
Recoveries of loans previously charged off	5,588		491		441		—		—		3,062
Balance, June 30, 2023	$	50,789	$	4,548	$	98	$	2,335	$	357	$	776

	Real Estate – Construction and Development		Real Estate – Commercial and Farmland		Real Estate – Residential		Total
Balance, December 31, 2022	$	32,659	$	67,433	$	57,043	$	205,677
Adjustment to allowance for adoption of ASU 2022-02	(37)		(722)		(847)		(1,711)

Provision for loan losses	21,395		32,644		5,987		93,019
Loans charged off	—		(3,320)		(197)		(35,626)
Recoveries of loans previously charged off	572		105		453		10,712
Balance, June 30, 2023	$	54,589	$	96,140	$	62,439	$	272,071

(dollars in thousands)
Commercial,
Financial and
Agricultural

Real Estate –
Construction and
Development

Real Estate –
Commercial and
Farmland

Real Estate –
Residential

Consumer
Installment
Loans and
Other

Purchased
Loans

Purchased
Loan
Pools
Total
Three Months Ended
September 30, 2017

Balance, June 30, 2017 $ 3,302
$ 3,756
$ 7,869
$ 5,605
$ 1,155
$ 1,791
$ 1,623
$ 25,101
Provision for loan losses 910
(587 ) 68
127
670
745
(146 ) 1,787
Loans charged off (1,091 ) (1 ) (18 ) (852 ) (320 ) (161 ) —
(2,443 )
Recoveries of loans previously charged off 409
126
26
56
17
887
—
1,521
Balance, September 30, 2017 $ 3,530
$ 3,294
$ 7,945
$ 4,936
$ 1,522
$ 3,262
$ 1,477
$ 25,966

Nine Months Ended
September 30, 2017:

Balance, December 31, 2016 $ 2,192
$ 2,990
$ 7,662
$ 6,786
$ 827
$ 1,626
$ 1,837
$ 23,920
Provision for loan losses 2,535
155
540
(9 ) 1,539
1,428
(360 ) 5,828
Loans charged off (1,896 ) (95 ) (413 ) (2,031 ) (922 ) (1,472 ) —
(6,829 )
Recoveries of loans previously charged off 699
244
156
190
78
1,680
—
3,047
Balance, September 30, 2017 $ 3,530
$ 3,294
$ 7,945
$ 4,936
$ 1,522
$ 3,262
$ 1,477
$ 25,966

Period-end allocation:

Loans individually evaluated for impairment ⁽¹⁾
$ 509
$ 81
$ 1,380
$ 1,058
$ —
$ 3,262
$ 105
$ 6,395
Loans collectively evaluated for impairment 3,021
3,213
6,565
3,878
1,522
—
1,372
19,571
Ending balance $ 3,530
$ 3,294
$ 7,945
$ 4,936
$ 1,522
$ 3,262
$ 1,477
$ 25,966

Loans:

Individually evaluated for impairment⁽¹⁾
$ 3,204
$ 627
$ 10,512
$ 8,636
$ —
$ 32,032
$ 915
$ 55,926
Collectively evaluated for impairment 1,304,005
549,562
1,548,370
960,653
189,109
763,271
464,303
5,779,273
Acquired with deteriorated credit quality —
—
—
—
—
121,823
—
121,823
Ending balance $ 1,307,209
$ 550,189
$ 1,558,882
$ 969,289
$ 189,109
$ 917,126
$ 465,218
$ 5,957,022


Three Months Ended June 30, 2022

(dollars in thousands)	Commercial, Financial and Agricultural		Consumer		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance
Balance, March 31, 2022	$	25,526	$	5,619	$	373	$	3,010	$	384	$	2,515


Provision for loan losses	1,738		557		(306)		875		(13)		200
Loans charged off	(4,391)		(1,137)		(41)		—		—		(1,066)
Recoveries of loans previously charged off	2,785		230		265		—		—		1,113
Balance, June 30, 2022	$	25,658	$	5,269	$	291	$	3,885	$	371	$	2,762

	Real Estate – Construction and Development		Real Estate – Commercial and Farmland		Real Estate – Residential		Total
Balance, March 31, 2022	$	26,831	$	67,033	$	29,960	$	161,251


Provision for loan losses	(3,954)		(7,647)		21,777		13,227
Loans charged off	—		(81)		(137)		(6,853)
Recoveries of loans previously charged off	355		44		225		5,017
Balance, June 30, 2022	$	23,232	$	59,349	$	51,825	$	172,642

Six Months Ended June 30, 2022

(dollars in thousands)	Commercial, Financial and Agricultural		Consumer Installment		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance
Balance, December 31, 2021	$	26,829	$	6,097	$	476	$	3,231	$	401	$	2,729


Provision for loan losses	1,953		1,346		(596)		654		(30)		108
Loans charged off	(8,805)		(2,562)		(129)		—		—		(2,435)
Recoveries of loans previously charged off	5,681		388		540		—		—		2,360
Balance, June 30, 2022	$	25,658	$	5,269	$	291	$	3,885	$	371	$	2,762

	Real Estate – Construction and Development		Real Estate – Commercial and Farmland		Real Estate – Residential		Total
Balance, December 31, 2021	$	22,045	$	77,831	$	27,943	$	167,582


Provision for loan losses	614		(17,199)		23,643		10,493
Loans charged off	—		(1,364)		(137)		(15,432)
Recoveries of loans previously charged off	573		81		376		9,999
Balance, June 30, 2022	$	23,232	$	59,349	$	51,825	$	172,642

~~(1) At September 30, 2017,~~Modifications to Borrowers Experiencing Financial Difficulty

The Company periodically provides modifications to borrowers experiencing financial difficulty. These modifications include either payment deferrals, term extensions, interest rate reductions, principal forgiveness or combinations of modification types. The determination of whether the borrower is experiencing financial difficulty is made on the date of the modification. When principal forgiveness is provided, the amount of principal forgiveness is charged off against the allowance for credit losses with a corresponding reduction in the amortized cost basis of the loan.

The following table shows the amortized cost basis of the loans ~~individually evaluated for impairment includes all nonaccrual loans greater than $100,000~~modified to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and ~~all troubled debt restructurings greater than $100,000, including all troubled debt restructurings and not only those currently classified as troubled debt restructurings.~~type of concession granted:

(dollars in thousands) Commercial,
Financial and
Agricultural Real Estate –
Construction and
Development Real Estate –
Commercial and
Farmland Real Estate –
Residential Consumer
Installment
Loans and
Other Purchased
Loans Purchased
Loan
Pools Total
Twelve Months Ended
December 31, 2016

Balance, January 1, 2016 $ 1,144
$ 5,009
$ 7,994
$ 4,760
$ 1,574
$ —
$ 581
$ 21,062
Provision for loan losses 2,647
(1,921 ) 107
2,757
(523 ) (232 ) 1,256
4,091
Loans charged off (1,999 ) (588 ) (708 ) (1,122 ) (351 ) (1,559 ) —
(6,327 )
Recoveries of loans previously charged off 400
490
269
391
127
3,417
—
5,094
Balance, December 31, 2016 $ 2,192
$ 2,990
$ 7,662
$ 6,786
$ 827
$ 1,626
$ 1,837
$ 23,920

Period-end allocation:

Loans individually evaluated for impairment⁽¹⁾
$ 120
$ 266
$ 1,502
$ 2,893
$ —
$ 1,626
$ —
$ 6,407
Loans collectively evaluated for impairment 2,072
2,724
6,160
3,893
827
—
1,837
17,513
Ending balance $ 2,192
$ 2,990
$ 7,662
$ 6,786
$ 827
$ 1,626
$ 1,837
$ 23,920

Loans:

Individually evaluated for impairment ⁽¹⁾
$ 501
$ 659
$ 12,423
$ 12,697
$ —
$ 34,141
$ —
$ 60,421
Collectively evaluated for impairment 966,637
362,386
1,393,796
768,321
109,401
886,516
568,314
5,055,371
Acquired with deteriorated credit quality —
—
�� —
—
—
148,534
—
148,534
Ending balance $ 967,138
$ 363,045
$ 1,406,219
$ 781,018
$ 109,401
$ 1,069,191
$ 568,314
$ 5,264,326


(dollars in thousands)	Payment Deferral		Term Extension		Total		Percentage of Total Class of Financial Receivable
Commercial, financial and agricultural	$	1,207	$	1,997	$	3,204	0.1	%





Real estate – construction and development	—		286		286		—	%
Real estate – commercial and farmland	—		1,206		1,206		—	%

Total	$	1,207	$	3,489	$	4,696	—	%

~~(1) At December 31, 2016, loans individually evaluated~~The Company does not have any commitments to lend additional funds to borrowers experiencing financial difficulty for impairment includes all nonaccrual loans greater than $100,000 and all troubled debt restructurings greater than $100,000, including all troubled debt restructurings and not only those currently classified as troubled debt restructurings.

(dollars in thousands) Commercial,
Financial and
Agricultural Real Estate –
Construction and
Development Real Estate –
Commercial and
Farmland Real Estate –
Residential Consumer
Installment
Loans and
Other Purchased
Loans Purchased
Loan
Pools Total
Three Months Ended
September 30, 2016

Balance, June 30, 2016 $ 1,667
$ 3,599
$ 7,459
$ 4,263
$ 2,160
$ 1,387
$ 1,199
$ 21,734
Provision for loan losses 677
(521 ) (554 ) 2,649
(1,595 ) (654 ) 809
811
Loans charged off (326 ) (60 ) —
(292 ) (74 ) (699 ) —
(1,451 )
Recoveries of loans previously charged off 119
131
13
40
78
1,488
—
1,869
Balance, September 30, 2016 $ 2,137
$ 3,149
$ 6,918
$ 6,660
$ 569
$ 1,522
$ 2,008
$ 22,963

Nine Months Ended
September 30, 2016:

Balance, December 31, 2015 $ 1,144
$ 5,009
$ 7,994
$ 4,760
$ 1,574
$ —
$ 581
$ 21,062
Provision for loan losses 1,987
(2,010 ) (559 ) 2,415
(932 ) 53
1,427
2,381
Loans charged off (1,273 ) (324 ) (708 ) (883 ) (192 ) (1,261 ) —
(4,641 )
Recoveries of loans previously charged off 279
474
191
368
119
2,730
—
4,161
Balance, September 30, 2016 $ 2,137
$ 3,149
$ 6,918
$ 6,660
$ 569
$ 1,522
$ 2,008
$ 22,963

Period-end allocation:

Loans individually evaluated for impairment⁽¹⁾
$ 107
$ 529
$ 883
$ 2,629
$ —
$ 1,522
$ —
$ 5,670
Loans collectively evaluated for impairment 2,030
2,620
6,035
4,031
569
—
2,008
17,293
Ending balance $ 2,137
$ 3,149
$ 6,918
$ 6,660
$ 569
$ 1,522
$ 2,008
$ 22,963

Loans:

Individually evaluated for impairment ⁽¹⁾
$ 424
$ 1,154
$ 11,699
$ 11,571
$ —
$ 34,991
$ —
$ 59,839
Collectively evaluated for impairment 625,523
327,154
1,285,883
755,362
72,269
939,243
624,886
4,630,320
Acquired with deteriorated credit quality —
—
—
—
—
155,147
—
155,147
Ending balance $ 625,947
$ 328,308
$ 1,297,582
$ 766,933
$ 72,269
$ 1,129,381
$ 624,886
$ 4,845,306

(1) At September 30, 2016, loans individually evaluated for impairment includes all nonaccrual loans greater than $100,000 and all troubled debt restructurings greater than $100,000, including all troubled debt restructurings and not only those currently classified as troubled debt restructurings.

~~NOTE 5 – ASSETS ACQUIRED IN FDIC-ASSISTED ACQUISITIONS~~

~~From October 2009 through July 2012,~~which the Company ~~participated in ten FDIC-assisted acquisitions whereby~~has modified their loans.

The following table describes the ~~Company purchased certain failed institutions out~~financial effect of the ~~FDIC’s receivership. These institutions include~~modifications made to borrowers experiencing financial difficulty during the ~~following:~~six months ended June 30, 2023:


Payment Deferral
Loan Type						Financial Effect
Commercial, financial and agricultural						Payments were reduced approximately 32% for three months before returning to a fully amortizing payment structure thereafter.
Commercial, financial and agricultural						Payments were reduced approximately 73% for four months before requiring full repayment.


Term Extension
Loan Type						Financial Effect
Commercial, financial and agricultural						Maturity dates were extended for an average of 10.5 months.
Real estate – construction and development						Maturity date was extended for 11 months.
Real estate – commercial and farmland						Maturity dates were extended for an average of 10.5 months.

The Company monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table depicts the performance of loans that have been modified in the last 12 months:


(dollars in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90 or More Days Past Due		Total
Commercial, financial and agricultural	$	2,707	$	497	$	—	$	—	$	3,204





Real estate – construction and development	286		—		—		—		286
Real estate – commercial and farmland	706		500		—		—		1,206

Total	$	3,699	$	997	$	—	$	—	$	4,696

The following table provides the amortized cost basis of financing receivables that had a payment default during both the three and six months ended June 30, 2023 and were modified in the 12 months before default to borrowers experiencing financial difficulty.

(dollars in thousands)

Term Extension

Commercial, financial and agricultural

497

~~Bank Acquired~~

~~Location~~

~~Branches~~

~~Date Acquired~~

~~American United Bank (“AUB”)~~

~~Lawrenceville, Ga.~~

~~October 23, 2009~~

~~United Security Bank (“USB”)~~

~~Sparta, Ga.~~

~~November 6, 2009~~

~~Satilla Community Bank (“SCB”)~~

~~St. Marys, Ga.~~

~~May 14, 2010~~

~~First Bank of Jacksonville (“FBJ”)~~

~~Jacksonville, Fl.~~

~~October 22, 2010~~

~~Tifton Banking Company (“TBC”)~~

~~Tifton, Ga.~~

~~November 12, 2010~~

~~Darby Bank & Trust (“DBT”)~~Real estate – commercial and farmland

~~Vidalia, Ga.~~

7500

~~November 12, 2010~~

~~High Trust Bank (“HTB”)~~

~~Stockbridge, Ga.~~

~~July 15, 2011~~

~~One Georgia Bank (“OGB”)~~Total

~~Midtown Atlanta, Ga.~~

997

~~July 15, 2011~~

~~Central Bank of Georgia (“CBG”)~~

~~Ellaville, Ga.~~

~~February 24, 2012~~

~~Montgomery Bank & Trust (“MBT”)~~

~~Ailey, Ga.~~

~~July 6, 2012~~

The determination of the initial fair values of loans at the acquisition date and the initial fair values of the related FDIC indemnification assets involves a high degree of judgment and complexity. The carrying values of the acquired loans and the FDIC indemnification assets reflect management’s best estimate of the fair value of each of these assets as of the date of acquisition.

However, the amount that the Company realizes on these assets could differ materially from the carrying values reflected in the financial statements included in this report, based upon the timing and amount of collections on the acquired loans in future periods. Because of the loss-sharing agreements with the FDIC on these assets, the Company does not expect to incur any significant losses. To the extent the actual values realized for the acquired loans are different from the estimates, the indemnification assets will generally be affected in an offsetting manner due to the loss-sharing support from the FDIC.

~~FASB ASC 310-30,~~ ~~Loans and Debt Securities Acquired with Deteriorated Credit Quality~~ (“ASC 310-30”), applies to a loan with evidence of deterioration of credit quality since origination, acquired by completion of a transfer for which it is probable, at acquisition, that the investor will be unable to collect all contractually required payments receivable. ASC 310-30 prohibits carrying over or creating an allowance for loan losses upon initial recognition for loans which fall under the scope of this statement. At the acquisition dates, a majority of these loans were valued based on the liquidation value of the underlying collateral because the future cash flows are primarily based on the liquidation of underlying collateral. There was no allowance for credit losses established related to these ASC 310-30 loans at the acquisition dates, based on the provisions of this statement. Over the life of the acquired loans, the Company continues to estimate cash flows expected to be collected. If the expected cash flows expected to be collected increases, then the Company adjusts the amount of accretable discount recognized on a prospective basis over the loan’s remaining life. If the expected cash flows expected to be collected decreases, then the Company records a provision for loan loss in its consolidated statements of income and comprehensive income.

Each acquisition with loss-sharing agreements has separate agreements for the single family residential assets (“SFR”) and the non-single family assets (“NSF”). The SFR agreements cover losses and recoveries for ten years. The NSF agreements are for eight years. During the first five years, losses and recoveries are covered. During the final three years, only recoveries, net of expenses, are covered. The AUB SFR agreement was terminated during 2012 and Ameris received a payment of $87,000. The AUB and USB NSF agreements passed their five-year anniversaries during the fourth quarter of 2014, the SCB NSF agreement passed its five-year anniversary during the second quarter of 2015, the FBJ, TBC and DBT NSF agreements passed their five-year anniversaries during the fourth quarter of 2015, the HTB and OGB NSF agreements passed their five-year anniversaries during the third quarter of 2016, and the CBG NSF passed its five-year anniversary during the first quarter of 2017. Losses will no longer be reimbursed on these agreements. MBT did not have a loss-sharing agreement.

At September 30, 2017, the Company’s FDIC loss-sharing payable totaled $8.2 million, which is comprised of an accrued clawback liability of $9.6 million, less $419,000 in current activity incurred but not yet received from the FDIC (net charge-offs offset by reimbursable expenses) and remaining indemnification of $1.0 million (for reimbursements associated with anticipated losses in future quarters).

~~The following table summarizes components of all covered assets at September 30, 2017 and December 31, 2016 and their origin:~~

(dollars in thousands)
Covered
Loans

Less: Fair
Value
Adjustments

Total
Covered
Loans
OREO
Less: Fair
Value
Adjustments

Total
Covered
OREO

Total
Covered
Assets

FDIC Loss-
Share
Receivable
(Payable)
September 30, 2017

AUB $ —
$ —
$ —
$ —
$ —
$ —
$ —
$ —
USB 2,763
12
2,751
—
—
—
2,751
(1,752 )
SCB 2,541
27
2,514
—
—
—
2,514
(169 )
FBJ 3,647
394
3,253
—
—
—
3,253
(312 )
DBT 9,663
356
9,307
81
—
81
9,388
(4,442 )
TBC 1,667
—
1,667
—
—
—
1,667
(8 )
HTB 1,856
28
1,828
—
—
—
1,828
27
OGB 930
31
899
—
—
—
899
(1,032 )
CBG 10,329
678
9,651
161
—
161
9,812
(502 )
Total $ 33,396
$ 1,526
$ 31,870
$ 242
$ —
$ 242
$ 32,112
$ (8,190 )

December 31, 2016

AUB $ —
$ —
$ —
$ —
$ —
$ —
$ —
$ (27 )
USB 3,199
13
3,186
51
—
51
3,237
(1,642 )
SCB 4,019
51
3,968
—
—
—
3,968
(32 )
FBJ 3,767
452
3,315
—
—
—
3,315
(234 )
DBT 12,166
565
11,601
—
—
—
11,601
(4,591 )
TBC 1,679
—
1,679
—
—
—
1,679
(33 )
HTB 1,913
33
1,880
—
—
—
1,880
734
OGB 1,077
32
1,045
—
—
—
1,045
(993 )
CBG 33,449
1,963
31,486
1,161
4
1,157
32,643
505
Total $ 61,269
$ 3,109
$ 58,160
$ 1,212
$ 4
$ 1,208
$ 59,368
$ (6,313 )

The shared-loss agreements are subject to the servicing procedures as specified in the agreement with the FDIC. The expected reimbursements under the shared-loss agreements were recorded as an indemnification asset at their estimated fair values on the acquisition dates. As of September 30, 2017 and December 31, 2016, the Company has recorded a clawback liability of $9.6 million and $9.3 million, respectively, which represents the obligation of the Company to reimburse the FDIC should actual losses be less than certain thresholds established in each loss-share agreement.

~~Changes in the FDIC shared-loss payable for the nine months ended September 30, 2017 and 2016 are as follows:~~

(dollars in thousands) September 30,
2017 September 30,
2016
Beginning balance, January 1 $ (6,313 ) $ 6,301
Payments to (received from) FDIC 97
(4,770 )
Amortization (747 ) (3,351 )
Changes in clawback liability (326 ) (682 )
Increase in receivable due to:

Net recoveries on covered loans (1,097 ) (4,118 )
Loss (gain) on covered other real estate owned (76 ) 203
Reimbursable expenses on covered assets 401
604
Other activity, net (129 ) (1,962 )
Ending balance $ (8,190 ) $ (7,775 )

~~The FDIC loss-sharing payable is included in other liabilities in the consolidated balance sheets. The FDIC loss-sharing receivable is included in other assets in the consolidated balance sheets.~~

~~NOTE 6 – OTHER REAL ESTATE OWNED~~

~~The following is a summary of the activity in other real estate owned during the nine months ended September 30, 2017 and 2016:~~

(dollars in thousands) September 30,
2017 September 30,
2016
Beginning balance, January 1 $ 10,874
$ 16,147
Loans transferred to other real estate owned 4,043
2,101
Net gains (losses) on sale and write-downs recorded in statement of income (766 ) (1,276 )
Sales proceeds (4,760 ) (6,580 )
Ending balance $ 9,391
$ 10,392

~~The following is a summary of the activity in purchased other real estate owned during the nine months ended September 30, 2017 and 2016:~~

(dollars in thousands) September 30,
2017 September 30,
2016
Beginning balance, January 1 $ 12,540
$ 19,344
Loans transferred to other real estate owned 4,294
6,262
Acquired in acquisitions —
1,838
Portion of gains (losses) on sale and write-downs payable to (receivable from) the FDIC under loss-sharing agreements 76
—
Net gains (losses) on sale and write-downs recorded in statement of income 265
(568 )
Sales proceeds (7,229 ) (11,750 )
Ending balance $ 9,946
$ 15,126

~~NOTE 7 – SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE~~

The Company classifies the sales of securities under agreements to repurchase as short-term borrowings. The amounts received under these agreements are reflected as a liability in the Company’s consolidated balance sheets and the securities underlying these agreements are included in investment securities in the Company’s consolidated balance sheets. At September 30, 2017 and December 31, 2016, all securities sold under agreements to repurchase mature on a daily basis. The market value of the securities fluctuate on a daily basis due to market conditions. The Company monitors the market value of the securities underlying these agreements on a daily basis and is required to transfer additional securities if the market value of the securities fall below the repurchase agreement price. The Company maintains an unpledged securities portfolio that it believes is sufficient to protect against a decline in the market value of the securities sold under agreements to repurchase.

~~The following is a summary of the Company’s securities sold under agreements to repurchase at September 30, 2017 and December 31, 2016.~~

(dollars in thousands) September 30,
2017 December 31, 2016
Securities sold under agreements to repurchase $ 14,156
$ 53,505

~~At September 30, 2017 and December 31, 2016, the investment securities underlying these agreements were comprised of state, county and municipal securities and mortgage-backed securities.~~

NOTE 84 – OTHER BORROWINGS

The Company has, from time to time, utilized certain borrowing arrangements to fund growth in earning assets or provide additional liquidity when appropriate spreads can be realized. At September 30, 2017 and December 31, 2016, there were $808.6 million and $492.3 million, respectively, in outstanding other borrowings.

Other borrowings consist of the following:


(dollars in thousands)	June 30, 2023		December 31, 2022
FHLB borrowings:
Fixed Rate Advance due January 9, 2023; fixed interest rate of 4.150%	$	—	$	300,000
Fixed Rate Advance due January 9, 2023; fixed interest rate of 4.110%	—		50,000
Fixed Rate Advance due January 12, 2023; fixed interest rate of 4.140%	—		50,000
Fixed Rate Advance due January 13, 2023; fixed interest rate of 4.150%	—		50,000
Fixed Rate Advance due January 17, 2023; fixed interest rate of 4.170%	—		350,000
Fixed Rate Advance due January 17, 2023; fixed interest rate of 4.250%	—		150,000
Fixed Rate Advance due January 18, 2023; fixed interest rate of 4.260%	—		200,000
Fixed Rate Advance due January 19, 2023; fixed interest rate of 4.230%	—		50,000
Fixed Rate Advance due January 20, 2023; fixed interest rate of 4.220%	—		150,000
Fixed Rate Advance due January 27, 2023; fixed interest rate of 4.230%	—		100,000
Fixed Rate Advance due July 19, 2023; fixed interest rate of 5.210%	500,000		—
Fixed Rate Advance due July 20, 2023; fixed interest rate of 5.210%	100,000		—
Fixed Rate Advance due July 21, 2023; fixed interest rate of 5.200%	100,000		—
Fixed Rate Advance due July 24, 2023; fixed interest rate of 5.200%	175,000		—
Fixed Rate Advance due July 31, 2023; fixed interest rate of 5.240%	200,000		—
Daily Rate Credit due December 5, 2023, fixed interest rate of 5.320%	100,000		—
Fixed Rate Advance due March 3, 2025; fixed interest rate of 1.208%	15,000		15,000
Fixed Rate Advance due March 2, 2027; fixed interest rate of 1.445%	15,000		15,000
Fixed Rate Advance due March 4, 2030; fixed interest rate of 1.606%	15,000		15,000
Fixed Rate Advance due December 9, 2030; fixed interest rate of 4.55%	1,383		1,389
Fixed Rate Advance due December 9, 2030; fixed interest rate of 4.55%	958		961
Principal Reducing Advance due September 29, 2031; fixed interest rate of 3.095%	1,202		1,275

Subordinated notes payable:

Subordinated notes payable due March 15, 2027 net of unamortized debt issuance cost of $0 and $551, respectively; fixed interest rate of 5.75% through March 14, 2022; variable interest rate thereafter at three-month LIBOR plus 3.616%	—		74,449
Subordinated notes payable due December 15, 2029 net of unamortized debt issuance cost of $1,436 and $1,680, respectively; fixed interest rate of 4.25% through December 14, 2024; variable interest rate thereafter at three-month SOFR plus 2.94%	109,064		118,320
Subordinated notes payable due May 31, 2030 net of unaccreted purchase accounting fair value adjustment of $845 and $906, respectively; fixed interest rate of 5.875% through May 31, 2025; variable interest rate thereafter at three-month LIBOR plus 3.63%	75,845		75,906
Subordinated notes payable due October 1, 2030 net of unamortized debt issuance cost of $1,463 and $1,564, respectively; fixed interest rate of 3.875% through September 30, 2025; variable interest rate thereafter at three-month SOFR plus 3.753%	108,537		108,436





Other Debt:
Advance from correspondent bank due November 28, 2024; secured by a loan receivable; variable interest rate at one-month SOFR plus 2.50%	10,000		—
Advance from correspondent bank due December 1, 2025; secured by a loan receivable; variable interest rate at one-month SOFR plus 2.65%	10,000		—
	$	1,536,989	$	1,875,736

(dollars in thousands) September 30,
2017 December 31,
2016
FHLB borrowings:

Daily Rate Credit from FHLB with a variable interest rate (1.32% at September 30, 2017 and 0.80% at December 31, 2016) $ 168,000
$ 150,000
Advance from FHLB due October 6, 2017; fixed interest rate of 1.16% 565,000
—
Advance from FHLB due January 6, 2017; fixed interest rate of 0.56% —
292,500
Advance from FHLB due January 9, 2017; fixed interest rate of 1.40% —
4,002
Advance from FHLB due May 30, 2017; fixed interest rate of 1.23% —
5,006
Subordinated notes payable:

Subordinated notes payable due March 15, 2027 net of unamortized debt issuance cost of $1,238; fixed interest rate of 5.75% through March 14, 2022; variable interest rate thereafter at three-month LIBOR plus 3.616% 73,762
—
Other debt:

Advance from correspondent bank due October 5, 2019; secured by a loan receivable; fixed interest rate of 4.25% 56
77
Advance from correspondent bank due September 5, 2026; secured by a loan receivable; fixed interest rate of 2.09% 1,754
1,886
Advances under revolving credit agreement with a regional bank due September 26, 2020; secured by subsidiary bank stock; variable interest rate at 90-day LIBOR plus 3.50% (4.43% at December 31, 2016) —
38,000
Advances under revolving credit agreement with a regional bank due January 7, 2017; fixed interest rate of 8.00% —
850
Total $ 808,572
$ 492,321

The advances from the FHLB are collateralized by a blanket lien on all eligible first mortgage loans and other specific loans in addition to FHLB stock. At ~~September~~June 30, ~~2017, $347.4 million~~2023, $3.30 billion was available for borrowing on lines with the FHLB.

~~At September 30, 2017, $30.0 million was available for borrowing under the revolving credit agreement with a regional bank, secured by subsidiary bank stock.~~

As of ~~September~~June 30, ~~2017,~~2023, the ~~Company~~Bank maintained credit arrangements with various financial institutions to purchase federal funds up to ~~$82.0~~$127.0 million.

The ~~Company~~Bank also participates in the Federal Reserve discount window borrowings program. At ~~September~~June 30, ~~2017,~~2023, the ~~Company~~Bank had ~~$1.04~~$3.58 billion of loans pledged at the Federal Reserve discount window and had ~~$678.1 million~~$2.63 billion available for borrowing.

~~Subordinated Notes Payable~~

~~On March 13, 2017,~~NOTE 5 – ACCUMULATED OTHER COMPREHENSIVE INCOME

Accumulated other comprehensive income (loss) for the Company ~~completed~~consists of changes in net unrealized gains and losses on debt securities available-for-sale. The reclassification for gains included in net income is recorded in net gain (loss) on securities in the ~~public offering~~consolidated statement of income and sale of $75.0 million in aggregate principal amount of its 5.75% Fixed-To-Floating Rate Subordinated Notes due 2027 (the “subordinated notes”). The subordinated notes were sold to the public at par pursuant to an underwriting agreement and were issued pursuant to an indenture and a supplemental indenture. The subordinated notes will mature on March 15, 2027 and through March 14, 2022 will bear a fixed rate of interest of 5.75% per annum, payable semi-annually in arrears on September 15 and March 15 of each year. Beginning March 15, 2022, the interest rate on the subordinated notes resets quarterly to a floating rate per annum equal to the then-current three-month LIBOR plus 3.616%, payable quarterly in arrears on June 15, September 15, December 15, and March 15 of each year to the maturity date or earlier redemption.comprehensive income.

On any scheduled interest payment date beginning March 15, 2022, the Company may, at its option, redeem the subordinated notes, in whole or in part, at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest.

The subordinated notes are unsecured and rank equally with all other unsecured subordinated indebtedness of the Company, including any subordinated indebtedness issued in the future under the indenture governing the subordinated notes. The subordinated notes are subordinated in right of payment to all senior indebtedness of the Company. The subordinated notes are obligations of the Company only and are not guaranteed by any subsidiaries, including the Bank. Additionally, the subordinated notes are structurally subordinated to all existing and future indebtedness and other liabilities of the Company’s subsidiaries, meaning that creditors of the Company’s subsidiaries (including, in the case of the Bank, its depositors) generally will be paid from those subsidiaries’ assets before holders of the subordinated notes have any claim to those assets.

For regulatory capital adequacy purposes, the subordinated notes qualify as Tier 2 capital for the Company. If in the future the subordinated notes no longer qualify as Tier 2 capital, the subordinated notes may be redeemed by the Company atfollowing table presents a ~~redemption price equal to 100% of the principal amount plus accrued and unpaid interest, subject to prior approval by the Board of Governors of the Federal Reserve System.~~

~~NOTE 9 – COMMITMENTS AND CONTINGENCIES~~

~~Loan Commitments~~

The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. They involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amount recognized in the Company’s balance sheets.

The Company’s exposure to credit loss is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments.

A summary of the ~~Company’s commitments is as follows:~~accumulated other comprehensive income (loss) balances, net of tax, for the periods indicated:


(dollars in thousands)	Accumulated Other Comprehensive Income (Loss)
Three Months Ended June 30, 2023
Balance, March 31, 2023	$	(35,581)

Unrealized loss on debt securities available-for-sales, net of tax	(15,037)
Balance, June 30, 2023	$	(50,618)

Three Months Ended June 30, 2022
Balance, June 30, 2022	$	(1,841)

Unrealized loss on debt securities available-for-sales, net of tax	(10,794)
Balance, June 30, 2022	$	(12,635)

Six Months Ended June 30, 2023
Balance, December 31, 2022	$	(46,507)

Unrealized loss on debt securities available-for-sales, net of tax	(4,111)
Balance, June 30, 2023	$	(50,618)

Six Months Ended June 30, 2022
Balance, December 31, 2021	$	15,590

Unrealized loss on debt securities available-for-sales, net of tax	(28,225)
Balance, June 30, 2022	$	(12,635)

(dollars in thousands) September 30,
2017 December 31,
2016
Commitments to extend credit $ 1,096,702
$ 1,101,257
Unused home equity lines of credit 63,951
62,586
Financial standby letters of credit 13,192
14,257
Mortgage interest rate lock commitments 113,056
91,426
Mortgage forward contracts with positive fair value —
150,000

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. These commitments, predominantly at variable interest rates, generally have fixed expiration dates of one year or less or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the customer.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. Collateral is required in instances which the Company deems necessary.

~~Other Commitments~~

~~As of September 30, 2017, a $75.0 million letter of credit issued by the FHLB was used to guarantee the Bank’s performance related to public fund deposit balances.~~

~~Contingencies~~

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed.

~~Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.~~

A former borrower of the Company has filed a claim related to a loan previously made by the Company asserting lender liability. The case was tried without a jury and a judgment was issued by the court against the Company awarding the borrower approximately $2.9 million on August 8, 2013. The judgment was appealed to the South Carolina Court of Appeals. On May 24, 2017, the Court of Appeals filed its decision and unanimously found in favor of the Company and reversed the trial court judgment. The plaintiff has a filed a petition for rehearing with the Court of Appeals, which has been denied. The plaintiff has filed a writ of certiorari asking the Supreme Court of South Carolina to hear the case. The Company believes the likelihood the Supreme Court will hear the case is not probable, and, accordingly the Company does not expect to incur any loss as a result of this case. Accordingly, the Company has not established any reserves related to this legal matter. In the event that the Company's assumptions used to evaluate this matter as neither probable nor estimable change in future periods, it may be required to record a liability for an adverse outcome.

~~NOTE 10 – SHAREHOLDERS’ EQUITY~~

On January 18, 2017, the Company issued 128,572 unregistered shares of its common stock to William J. Villari in exchange for 4.99% of the outstanding shares of common stock of USPF. A registration statement was filed with the Securities and Exchange Commission on February 13, 2017 to register the resale or other disposition of these shares. The issuance of the 128,572 common shares was valued at $45.45 per share, resulting in an increase in shareholders’ equity of $5.8 million. For additional information regarding the investment in USPF, see Note 2.

On March 6, 2017, the Company completed an underwritten public offering of 2,012,500 shares of the Company’s common stock at a price to the public of $46.50 per share. The Company received net proceeds from the issuance of approximately $88.7 million, after deducting $4.9 million in underwriting discounts and commissions and other issuance costs.

In March 2017, the Company made a capital contribution to the Bank in the amount of $110.0 million, using the net proceeds of the March 6, 2017 issuance of common stock as well as a portion of the net proceeds of the March 13, 2017 issuance of the Company’s 5.75% Fixed-To-Floating Rate Subordinated Notes due 2027 discussed in Note 8.

NOTE ~~11 – ACCUMULATED OTHER COMPREHENSIVE INCOME~~

Accumulated other comprehensive income for the Company consists of changes in net unrealized gains and losses on investment securities available for sale and an interest rate swap derivative designated as a cash flow hedge. The following tables present a summary of the accumulated other comprehensive income balances, net of tax, as of September 30, 2017 and 2016:

(dollars in thousands)
Unrealized
Gain (Loss)
on Derivatives

Unrealized
Gain (Loss)
on Securities

Accumulated
Other Comprehensive
Income (Loss)
Balance, January 1, 2017 $ 176
$ (1,234 ) $ (1,058 )
Reclassification for gains included in net income, net of tax —
(24 ) (24 )
Current year changes, net of tax (38 ) 4,361
4,323
Balance, September 30, 2017 $ 138
$ 3,103
$ 3,241

(dollars in thousands)

Unrealized
Gain (Loss)
on Derivatives

Unrealized
Gain (Loss)
on Securities

Accumulated
Other Comprehensive
Income (Loss)
Balance, January 1, 2016 $ 152
$ 3,201
$ 3,353
Reclassification for gains included in net income, net of tax —
(61 ) (61 )
Current year changes, net of tax (567 ) 7,724
7,157
Balance, September 30, 2016 $ (415 ) $ 10,864
$ 10,449

~~NOTE 12~~6 – WEIGHTED AVERAGE SHARES OUTSTANDING

Earnings per share have been computed based on the following weighted average number of common shares outstanding:


	Three Months Ended September 30,		Nine Months Ended September 30,			Three Months Ended June 30,		Six Months Ended June 30,
(share data in thousands)	2017	2016	2017	2016	(share data in thousands)	2023	2022	2023	2022
Average common shares outstanding	37,225	34,870	36,690	34,156	Average common shares outstanding	68,990	69,136	69,085	69,246
Common share equivalents:					Common share equivalents:
Stock options	70	108	70	100	Stock options	—	16	—	24
Nonvested restricted share grants	258	217	257	214	Nonvested restricted share grants	—	46	57	97
Performance stock units					Performance stock units	45	118	50	118
Average common shares outstanding, assuming dilution	37,553	35,195	37,017	34,470	Average common shares outstanding, assuming dilution	69,035	69,316	69,192	69,485

For the three ~~and nine-month periods~~months ended ~~September~~June 30, ~~2017 and 2016,~~2023, there were 345,576 anti-dilutive nonvested restricted share grants and performance stock units excluded from the computation of earnings per share. For the three months ended June 30, 2022, there were 33,536 anti-dilutive performance stock units excluded from the computation of earnings per share. There were 84,487 anti-dilutive performance stock units excluded from the computation of earnings per share for the six months ended June 30, 2023 There were no ~~potential common shares with strike prices~~anti-dilutive securities excluded from the computation of earnings per share for the six months ended June 30, 2022.

NOTE 7 – FAIR VALUE MEASURES

The fair value of an asset or liability is the current amount that would ~~cause them~~be exchanged between willing parties, other than in a forced liquidation. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various assets and liabilities. In cases where quoted market prices are not available, fair value is based on discounted cash flows or other valuation techniques. These techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the asset or liability. The accounting standard for disclosures about the fair value measures excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.

The Company's loans held for sale under the fair value option are comprised of the following:


(dollars in thousands)	June 30, 2023		December 31, 2022
Mortgage loans held for sale	$	391,212	$	390,583
SBA loans held for sale	260		1,495
Total loans held for sale	$	391,472	$	392,078

The Company has elected to record mortgage loans held for sale at fair value in order to eliminate the complexities and inherent difficulties of achieving hedge accounting and to better align reported results with the underlying economic changes in value of the loans and related hedge instruments. This election impacts the timing and recognition of origination fees and costs, as well as servicing value, which are now recognized in earnings at the time of origination. Interest income on mortgage loans held for sale is recorded on an accrual basis in the consolidated statements of income and comprehensive income under the heading interest income – interest and fees on loans. The servicing value is included in the fair value of the interest rate lock commitments (“IRLCs”) with borrowers. The mark to market adjustments related to mortgage loans held for sale and the associated economic hedges are captured in mortgage banking activities.

A net loss of $3.3 million and a net gain of $2.3 million resulting from changes in fair value of these mortgage loans were recorded in income during the three and six months ended June 30, 2023, respectively. For the three and six months ended June 30, 2022, a net gain of $11.2 million and a net loss of $32.7 million, respectively, resulting from changes in fair value of these mortgage loans were recorded in income. Net gains of $7.9 million and $5.1 million resulting from changes in the fair value of the related derivative financial instruments used to hedge exposure to the market-related risks associated with these mortgage loans were recorded in income during the three and six months ended June 30, 2023, respectively. For the three and six months ended June 30, 2022, net losses of $27.1 million and $1.2 million, respectively, resulting from changes in the fair value of the related derivative financial instruments were recorded in income. The changes in fair value of both mortgage loans held for sale and the related derivative financial instruments are recorded in mortgage banking activity in the consolidated statements of income and comprehensive income. The Company’s valuation of mortgage loans held for sale incorporates an assumption for credit risk; however, given the short-term period that the Company holds these loans, valuation adjustments attributable to instrument-specific credit risk is nominal.

The following table summarizes the difference between the fair value and the principal balance for mortgage loans held for sale measured at fair value as of June 30, 2023 and December 31, 2022:


(dollars in thousands)	June 30, 2023		December 31, 2022
Aggregate fair value of mortgage loans held for sale	$	391,212	$	390,583
Aggregate unpaid principal balance of mortgage loans held for sale	387,893		389,610
Past-due loans of 90 days or more	2,018		—
Nonaccrual loans	2,018		—
Unpaid principal balance of nonaccrual loans	1,980		—

The following table summarizes the difference between the fair value and the principal balance for SBA loans held for sale measured at fair value as of June 30, 2023 and December 31, 2022:


(dollars in thousands)	June 30, 2023		December 31, 2022
Aggregate fair value of SBA loans held for sale	$	260	$	1,495
Aggregate unpaid principal balance of SBA loans held for sale	240		1,350
Past-due loans of 90 days or more	—		—
Nonaccrual loans	—		—

The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Securities available-for-sale, loans held for sale under the fair value option and derivative financial instruments are recorded at fair value on a recurring basis. From time to time, the Company may be ~~anti-dilutive.~~required to record at fair value other assets on a nonrecurring basis, such as collateral-dependent loans, loan servicing rights and OREO. Additionally, the Company is required to disclose, but not record, the fair value of other financial instruments.

The following table presents the fair value measurements of assets and liabilities measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall as of June 30, 2023 and December 31, 2022:


	Recurring Basis Fair Value Measurements
	June 30, 2023
(dollars in thousands)	Fair Value		Level 1		Level 2		Level 3
Financial assets:
Investment securities available-for-sale:
U.S. Treasuries	$	758,666	$	758,666	$	—	$	—
U.S. government sponsored agencies	972		—		972		—
State, county and municipal securities	32,228		—		32,228		—
Corporate debt securities	15,055		—		14,080		975
SBA pool securities	23,826		—		23,826		—
Mortgage-backed securities	629,609		—		629,609		—
Loans held for sale	391,472		—		391,472		—
Derivative financial instruments	7,186		—		7,186		—
Mortgage banking derivative instruments	9,016		—		9,016		—
Total recurring assets at fair value	$	1,868,030	$	758,666	$	1,108,389	$	975
Financial liabilities:
Derivative financial instruments	$	7,400	$	—	$	7,400	$	—

Total recurring liabilities at fair value	$	7,400	$	—	$	7,400	$	—


	Recurring Basis Fair Value Measurements
	December 31, 2022
(dollars in thousands)	Fair Value		Level 1		Level 2		Level 3
Financial assets:
Investment securities available-for-sale:
U.S. Treasuries	$	759,534	$	759,534	$	—	$	—
U.S. government sponsored agencies	979		—		979		—
State, county and municipal securities	34,195		—		34,195		—
Corporate debt securities	15,926		—		14,771		1,155
SBA pool securities	27,398		—		27,398		—
Mortgage-backed securities	662,028		—		662,028		—
Loans held for sale	392,078		—		392,078		—
Derivative financial instruments	4,580		—		4,580		—
Mortgage banking derivative instruments	3,933		—		3,933		—
Total recurring assets at fair value	$	1,900,651	$	759,534	$	1,139,962	$	1,155
Financial liabilities:
Derivative financial instruments	$	4,574	$	—	$	4,574	$	—

Total recurring liabilities at fair value	$	4,574	$	—	$	4,574	$	—

The following table presents the fair value measurements of assets measured at fair value on a non-recurring basis, as well as the general classification of such instruments pursuant to the valuation hierarchy as of June 30, 2023 and December 31, 2022:


	Nonrecurring Basis Fair Value Measurements
(dollars in thousands)	Fair Value		Level 1		Level 2		Level 3
June 30, 2023
Collateral-dependent loans	$	26,902	$	—	$	—	$	26,902



Total nonrecurring assets at fair value	$	26,902	$	—	$	—	$	26,902

December 31, 2022
Collateral-dependent loans	$	31,972	$	—	$	—	$	31,972



Total nonrecurring assets at fair value	$	31,972	$	—	$	—	$	31,972

The inputs used to determine estimated fair value of collateral-dependent loans include market conditions, loan term, underlying collateral characteristics and discount rates.

For the six months ended June 30, 2023 and the year ended December 31, 2022, there was not a change in the methods and significant assumptions used to estimate fair value.

The following table shows significant unobservable inputs used in the fair value measurement of Level 3 assets:


(dollars in thousands)	Fair Value		Valuation Technique	Unobservable Inputs	Range of Discounts	Weighted Average Discount
June 30, 2023
Recurring:
Debt securities available-for-sale	$	975	Discounted cash flows	Probability of Default	13.2%	13.2%
				Loss Given Default	44%	44%
Nonrecurring:
Collateral-dependent loans	$	26,902	Third-party appraisals and discounted cash flows	Collateral discounts and discount rates	0% - 75%	29%




December 31, 2022
Recurring:
Debt securities available-for-sale	$	1,155	Discounted cash flows	Probability of Default	12.1%	12.1%
				Loss Given Default	41%	41%
Nonrecurring:
Collateral-dependent loans	$	31,972	Third-party appraisals and discounted cash flows	Collateral discounts and discount rates	0% - 48%	27%

The carrying amount and estimated fair value of the Company’s financial instruments, not shown elsewhere in these financial statements, were as follows:


			Fair Value Measurements
			June 30, 2023
(dollars in thousands)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and due from banks	$	284,552	$	284,552	$	—	$	—	$	284,552
Federal funds sold and interest-bearing accounts	1,034,578		1,034,578		—		—		1,034,578

Debt securities held-to-maturity	142,513		—		121,891		—		121,891

Loans, net	20,172,786		—		—		19,515,996		19,515,996
Accrued interest receivable	77,360		—		7,537		69,823		77,360
Financial liabilities:
Deposits	20,443,125		—		20,452,110		—		20,452,110

Other borrowings	1,536,989		—		1,522,335		—		1,522,335
Subordinated deferrable interest debentures	129,319		—		141,225		—		141,225
Accrued interest payable	24,929		—		24,929		—		24,929


			Fair Value Measurements
			December 31, 2022
(dollars in thousands)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and due from banks	$	284,567	$	284,567	$	—	$	—	$	284,567
Federal funds sold and interest-bearing accounts	833,565		833,565		—		—		833,565

Debt securities held-to-maturity	134,864		—		114,538				114,538
Loans, net	19,617,604		—		—		19,067,612		19,067,612
Accrued interest receivable	77,042		—		7,694		69,348		77,042
Financial liabilities:
Deposits	19,462,738		—		19,455,187		—		19,455,187

Other borrowings	1,875,736		—		1,861,850		—		1,861,850
Subordinated deferrable interest debentures	128,322		—		125,988		—		125,988
Accrued interest payable	10,530		—		10,530		—		10,530

NOTE 138 – ~~FAIR VALUE MEASURES~~COMMITMENTS AND CONTINGENCIES

The fair value of an asset or liability is the current amount that would be exchanged between willing parties, other than in a forced liquidation. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various assets and liabilities. In cases where quoted market prices are not available, fair value is based on discounted cash flows or other valuation techniques. These techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the asset or liability. The accounting standard for disclosures about the fair value measures excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.Loan Commitments

~~The Company’s loans held for sale are carried at fair value and are comprised of the following:~~

(dollars in thousands) September 30,
2017 December 31,
2016
Mortgage loans held for sale $ 132,201
$ 105,924
SBA loans held for sale 5,191
—
Total loans held for sale $ 137,392
$ 105,924

The Company ~~has elected~~is a party to ~~record mortgage loans held for sale at fair value in order to eliminate the complexities and inherent difficulties of achieving hedge accounting and to better align reported results~~financial instruments with the underlying economic changes in value of the loans and related hedge instruments. This election impacts the timing and recognition of origination fees and costs, as well as servicing value, which are now recognized in earnings at the time of origination. Interest income on mortgage loans held for sale is recorded on an accrual basisoff-balance-sheet risk in the ~~consolidated statements~~normal course of ~~income and comprehensive income under~~business to meet the heading interest income – interest and fees on loans. The servicing value is included in the fair value of the interest rate lock commitments (“IRLCs”) with borrowers. The mark to market adjustments related to mortgage loans held for sale and the associated economic hedges are captured in mortgage banking activities. Net gains of $5.7 million and $4.9 million resulting from fair value changes of these mortgage loans were recorded in income during the nine months ended September 30, 2017 and 2016, respectively. The amount does not reflect changes in fair values of related derivative instruments used to hedge exposure to market-related risks associated with these mortgage loans. The change in fair value of both mortgage loans held for sale and the related derivative instruments are recorded in mortgage banking activity in the consolidated statements of income and comprehensive income. The Company’s valuation of mortgage loans held for sale incorporates an assumption for credit risk; however, given the short-term period that the Company holds these loans, valuation adjustments attributable to instrument-specific credit risk is nominal.

~~The following table summarizes the difference between the fair value and the principal balance for mortgage loans held for sale measured at fair value as of September 30, 2017 and December 31, 2016:~~

(dollars in thousands)
September 30,
2017 December 31,
2016
Aggregate fair value of mortgage loans held for sale $ 132,201
$ 105,924
Aggregate unpaid principal balance 126,503
103,691
Past-due loans of 90 days or more —
—
Nonaccrual loans —
—

The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Securities available for sale, mortgage loans held for sale and derivatives are recorded at fair value on a recurring basis. From time to time, the Company may be required to record at fair value other assets on a nonrecurring basis, such as impaired loans and OREO. Additionally, the Company is required to disclose, but not record, the fair value of other financial instruments.

~~Fair Value Hierarchy~~

The Company groups assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are:

~~Level 1~~– ~~Quoted prices in active markets for identical assets or liabilities.~~

~~Level 2~~– Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

~~Level 3~~– ~~Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.~~

~~The following methods and assumptions were used by the Company in estimating the fair value~~financing needs of its ~~assets and liabilities recorded at fair value and for estimating the fair value of its~~customers. These financial ~~instruments:~~

~~Cash, Due From Banks, Federal Funds Sold and Interest-Bearing Accounts:~~ ~~The carrying amount of cash, due from banks, federal funds sold and interest-bearing deposits in banks approximates fair value.~~

~~Investment Securities Available for Sale:~~ The fair value of securities available for sale is determined by various valuation methodologies. Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows. Level 2 securitiesinstruments include certain U.S. agency bonds, mortgage-backed securities, collateralized mortgage and debt obligations, and municipal securities. The Level 2 fair value pricing is provided by an independent third party and is based upon similar securities in an active market. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy and include certain residual municipal securities and other less liquid securities.

~~Other Investments:~~ FHLB stock, Federal Reserve Bank stock and the Company’s minority equity investment in USPF are included in other investment securities at original cost basis. These investments do not have readily determinable fair values and are carried at original cost basis. It is not practical to determine the fair value of these investments due to restrictions placed on transferability. These investments are periodically evaluated for impairment based on ultimate recovery of par value or cost basis. Cost basis approximates fair value for these investments.

~~Loans Held for Sale:~~ The Company records loans held for sale at fair value. The fair value of loans held for sale is determined on outstanding commitments from third party investors in the secondary markets and is classified within Level 2 of the valuation hierarchy.

~~Loans:~~ The carrying amount of variable-rate loans that reprice frequently and have no significant change in credit risk approximates fair value. The fair value of fixed-rate loans is estimated based on discounted contractual cash flows, using interest rates currently being offered for loans with similar terms to borrowers with similar credit quality. The fair value of impaired loans is estimated based on discounted contractual cash flows or underlying collateral values, where applicable. A loan is determined to be impaired if the Company believes it is probable that all principal and interest amounts due according to the terms of the note will not be collected as scheduled. The fair value of impaired loans is determined in accordance with ASC 310-10, ~~Accounting by Creditors for Impairment of a Loan~~, and generally results in a specific reserve established through a charge to the provision for loan losses. Losses on impaired loans are charged to the allowance when management believes the uncollectability of a loan is confirmed. Management has determined that the majority of impaired loans are Level 3 assets due to the extensive use of market appraisals.

~~Other Real Estate Owned:~~ The fair value of other real estate owned (“OREO”) is determined using certified appraisals and internal evaluations that value the property at its highest and best uses by applying traditional valuation methods common to the industry. The Company does not hold any OREO for profit purposes and all other real estate is actively marketed for sale. In most

cases, management has determined that additional write-downs are required beyond what is calculable from the appraisal to carry the property at levels that would attract buyers. Because this additional write-down is not based on observable inputs, management has determined that other real estate owned should be classified as Level 3.

~~Intangible Assets:~~ Intangible assets consist of core deposit premiums acquired in connection with business combinations and are based on the established value of acquired customer deposits. The core deposit premium is initially recognized based on a valuation performed as of the consummation date and is amortized over an estimated useful life of seven to ten years.

~~FDIC Loss-Share Receivable/Payable:~~ Because the FDIC will reimburse the Company for certain acquired loans should the Company experience a loss, an indemnification asset is recorded at fair value at the acquisition date. The indemnification asset is recognized at the same time as the indemnified loans, and measured on the same basis, subject to collectability or contractual limitations. The shared loss agreements on the acquisition date reflect the reimbursements expected to be received from the FDIC, using an appropriate discount rate, which reflects counterparty credit risk and other uncertainties. The shared loss agreements continue to be measured on the same basis as the related indemnified loans, and the loss-share receivable/payable is impacted by changes in estimated cash flows associated with these loans.

~~Accrued Interest Receivable/Payable:~~ ~~The carrying amount of accrued interest receivable and accrued interest payable approximates fair value.~~

~~Cash Value of Bank Owned Life Insurance:~~ ~~The carrying value of cash value of bank owned life insurance approximates fair value.~~

~~Deposits:~~ The carrying amount of demand deposits, savings deposits and variable-rate certificates of deposit approximates fair value. The fair value of fixed-rate certificates of deposit is estimated based on discounted contractual cash flows using interest rates currently being offered for certificates of similar maturities.

~~Securities Sold under Agreements to Repurchase and Other Borrowings:~~ The carrying amount of variable rate borrowings and securities sold under repurchase agreements approximates fair value and are classified as Level 1. The fair value of fixed rate other borrowings is estimated based on discounted contractual cash flows using the current incremental borrowing rates for similar borrowing arrangements and are classified as Level 2.

~~Subordinated Deferrable Interest Debentures:~~ The fair value of the Company’s trust preferred securities is based primarily upon discounted cash flows using rates for securities with similar terms and remaining maturities and are classified as Level 2.

~~Off-Balance-Sheet Instruments:~~ ~~Because~~ commitments to extend credit and standby letters of credit. They involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amount recognized in the Company’s balance sheets.


(dollars in thousands)	June 30, 2023		December 31, 2022
Commitments to extend credit	$	5,398,013	$	6,318,039
Unused home equity lines of credit	376,944		345,001
Financial standby letters of credit	39,096		33,557
Mortgage interest rate lock commitments	302,208		148,148

Commitments to extend credit are ~~typically made using~~agreements to lend to a customer as long as there is no violation of any condition established in the contract. These commitments, predominantly at variable interest rates, generally have fixed expiration dates or other termination clauses and ~~have short maturities,~~may require payment of a fee. Since many of the ~~carrying value~~commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The amount of collateral

obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the customer.

~~Derivatives:~~private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. Collateral is required in instances which the Company deems necessary. The Company has ~~entered into derivative~~not been required to perform on any material financial ~~instruments to manage interest rate risk. The valuation~~standby letters of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of the derivatives. This analysis reflects the contractual terms of the derivative, including the period to maturity,credit and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair value of the derivatives is determined using the market standard methodology of netting the discounted future fixed cash receipts and the discounted expected variable cash payments. The variable cash payments are based on an expectation of future interest rates (forward curves derived from observable market interest rate curves).

The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has ~~considered~~not incurred any losses on financial standby letters of credit for the ~~impact of netting any applicable credit enhancements such as collateral postings, thresholds, mutual puts and guarantees.~~

Although the Company has determined that the majority of the inputs used to value its derivative fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself or the counterparty. However, as of September 30, 2017 and December 31, 2016, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustment is not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuation in its entirety is classified in Level 2 of the fair value hierarchy.

Recurring Basis
Fair Value Measurements
September 30, 2017
(dollars in thousands)
Fair Value Level 1 Level 2 Level 3
Financial assets:

U.S. government sponsored agencies $ 1,004
$ —
$ 1,004
$ —
State, county and municipal securities 143,387
—
143,387
—
Corporate debt securities 47,249
—
45,749
1,500
Mortgage-backed securities 627,953
—
627,953
—
Loans held for sale 137,392
—
137,392
—
Mortgage banking derivative instruments 3,836
—
3,836
—
Total recurring assets at fair value $ 960,821
$ —
$ 959,321
$ 1,500
Financial liabilities:

Derivative financial instruments $ 723
$ —
$ 723
$ —
Mortgage banking derivative instruments 237
—
237
—
Total recurring liabilities at fair value $ 960
$ —
$ 960
$ —

Recurring Basis
Fair Value Measurements
December 31, 2016
(dollars in thousands) Fair Value Level 1 Level 2 Level 3
Financial assets:

U.S. government sponsored agencies $ 1,020
$ —
$ 1,020
$ —
State, county and municipal securities 152,035
—
152,035
—
Corporate debt securities 32,172
—
30,672
1,500
Mortgage-backed securities 637,508
—
637,508
—
Loans held for sale 105,924
—
105,924
—
Mortgage banking derivative instruments 4,314
—
4,314
—
Total recurring assets at fair value $ 932,973
$ —
$ 931,473
$ 1,500
Financial liabilities:

Derivative financial instruments $ 978
$ —
$ 978
$ —
Total recurring liabilities at fair value $ 978
$ —
$ 978
$ —

Nonrecurring Basis
Fair Value Measurements
(dollars in thousands) Fair Value Level 1 Level 2 Level 3
September 30, 2017

Impaired loans carried at fair value $ 28,790
$ —
$ —
$ 28,790
Other real estate owned 435
—
—
435
Purchased other real estate owned 9,946
—
—
9,946
Total nonrecurring assets at fair value $ 39,171
$ —
$ —
$ 39,171

December 31, 2016

Impaired loans carried at fair value $ 28,253
$ —
$ —
$ 28,253
Other real estate owned 1,172
—
—
1,172
Purchased other real estate owned 12,540
—
—
12,540
Total nonrecurring assets at fair value $ 41,965
$ —
$ —
$ 41,965

The inputs used to determine estimated fair value of impaired loans include market conditions, loan terms, underlying collateral characteristics and discount rates. The inputs used to determine fair value of other real estate owned include market conditions, estimated marketing period or holding period, underlying collateral characteristics and discount rates.

~~For the nine~~six months ended ~~September~~June 30, ~~2017~~2023 and the year ended December 31, ~~2016, there was not a change~~2022.

The Company maintains an allowance for credit losses on unfunded commitments which is recorded in other liabilities on the ~~methods and significant assumptions used to estimate fair value.~~

consolidated balance sheets. The following table ~~shows significant unobservable inputs used~~presents activity in the ~~fair value measurement~~allowance for unfunded commitments for the periods presented:


	Three Months Ended June 30,				Six Months Ended June 30,
(dollars in thousands)	2023		2022		2023		2022
Balance at beginning of period	$	52,757	$	42,194	$	52,411	$	33,185


Provision for unfunded commitments	1,873		1,779		2,219		10,788
Balance at end of period	$	54,630	$	43,973	$	54,630	$	43,973

As of ~~Level 3 assets~~June 30, 2023, letters of credit issued by the FHLB totaling $900.0 million were used to guarantee the Bank’s performance related to a portion of its public fund deposit balances.

Litigation and ~~liabilities:~~Regulatory Contingencies

(dollars in thousands) Fair Value
Valuation
Technique
Unobservable Inputs
Range of
Discounts

Weighted
Average
Discount
September 30, 2017

Recurring:

Investment securities available for sale $ 1,500
Discounted par values Credit quality of underlying issuer 0% 0%
Nonrecurring:

Impaired loans $ 28,790
Third-party appraisals and discounted cash flows Collateral discounts and
discount rates 10% - 100% 25%
Other real estate owned $ 435
Third-party appraisals and sales contracts Collateral discounts and estimated
costs to sell 15% - 20% 13%
Purchased other real estate owned $ 9,946
Third-party appraisals Collateral discounts and estimated
costs to sell 10% - 74% 16%

December 31, 2016

Recurring:

Investment securities available for sale $ 1,500
Discounted par values Credit quality of underlying issuer 0% 0%
Nonrecurring:

Impaired loans $ 28,253
Third-party appraisals and discounted cash flows Collateral discounts and
discount rates 15% - 100% 28%
Other real estate owned $ 1,172
Third-party appraisals and sales contracts Collateral discounts and estimated
costs to sell 15% - 74% 22%
Purchased other real estate owned $ 12,540
Third-party appraisals Collateral discounts and estimated
costs to sell 10% - 74% 15%

The ~~carrying~~Company has been involved in various legal proceedings with William J. Villari, who formerly owned US Premium Finance Holding Company (“USPF”), a provider of commercial insurance premium finance loans that the Company acquired in January 2018. First, on December 13, 2018, Mr. Villari filed a demand for arbitration, claiming that the Bank’s termination of his employment for “cause” was improper and that he was entitled to additional compensation from the Company and the Bank under his employment agreement. Second, on December 28, 2018, Mr. Villari and his wholly owned company, P1 Finance Holdings LLC (“P1”), filed a lawsuit against the Bank in Broward County, Florida, seeking additional compensation for his service while an employee, as well as other relief. Third, on May 30, 2019, CEBV LLC (“CEBV”), which also is wholly owned by Mr. Villari, filed a lawsuit against the Bank in Duval County, Florida, arising out of a loan purchase agreement with the Bank dated May 8, 2018. CEBV’s complaint in that lawsuit, which also named as a defendant the Company’s former Chief Executive Officer, Dennis J. Zember Jr., sought unspecified damages and other relief related to asserted claims for fraudulent inducement and breach of contract based on the Bank’s alleged failure to provide sufficient assistance to CEBV in collecting on loans purchased by CEBV from the Bank. In addition, on January 30, 2019, the Company and the Bank filed a lawsuit against Mr. Villari in Dekalb County, Georgia, asserting claims for unspecified damages arising from Mr. Villari’s alleged failure to disclose material information in connection with the sale of USPF to the Company and the Bank.

In the first of these proceedings to be adjudicated, the Company and the Bank received on November 20, 2019, an Order and Award from the American Arbitration Association in which the arbitrator ruled that the Company and the Bank had cause to terminate Mr. Villari and had properly exercised that right and that, as a result, Mr. Villari is not entitled to any additional payments under his employment agreement or a separate management and licensing agreement with the Bank.

On April 24, 2023, all parties to the remaining cases entered into a settlement and release agreement resolving all remaining disputes between them. Subsequently all pending actions and claims concerning those cases were dismissed with prejudice. The terms of the parties’ settlement do not have a material adverse effect on the consolidated results of operations or financial condition of the Company.

Additionally, from time to time, the Company and the Bank are subject to various legal proceedings, claims and disputes that arise in the ordinary course of business. The Company and the Bank are also subject to regulatory examinations, information gathering requests, inquiries and investigations in the ordinary course of business. Based on the Company’s current knowledge and advice of counsel, management presently does not believe that the liabilities arising from these legal and regulatory matters will have a material adverse effect on the Company’s consolidated financial condition, results of operations or cash flows.

However, it is possible that the ultimate resolution of these legal and regulatory matters could have a material adverse effect on the Company’s results of operations and financial condition for any particular period.

The Company’s management and its legal counsel periodically assess contingent liabilities, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, ~~fair value of~~then the estimated liability would be accrued in the Company’s financial ~~instruments,~~statements. If the assessment indicates that a potentially material loss contingency is not ~~shown elsewhere~~probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in ~~these financial statements, were as follows:~~which case the nature of the guarantee would be disclosed.

Fair Value Measurements
September 30, 2017
(dollars in thousands)
Carrying
Amount
Level 1 Level 2 Level 3 Total
Financial assets:

Cash and due from banks $ 131,071
$ 131,071
$ —
$ —
$ 131,071
Federal funds sold and interest-bearing accounts 112,844
112,844
—
—
112,844
Loans, net 5,902,267
—
—
5,871,518
5,871,518
Accrued interest receivable 25,068
25,068
—
—
25,068
Financial liabilities:

Deposits $ 5,895,504
$ —
$ 5,896,989
$ —
$ 5,896,989
Securities sold under agreements to repurchase 14,156
14,156
—
—
14,156
Other borrowings 808,572
—
809,810
—
809,810
Subordinated deferrable interest debentures 85,220
—
70,984
—
70,984
FDIC loss-share payable 8,190
—
—
9,077
9,077
Accrued interest payable 2,313
2,313
—
—
2,313

Fair Value Measurements
December 31, 2016
(dollars in thousands)
Carrying
Amount
Level 1 Level 2 Level 3 Total
Financial assets:

Cash and due from banks $ 127,164
$ 127,164
$ —
$ —
$ 127,164
Federal funds sold and interest-bearing accounts 71,221
71,221
—
—
71,221
Loans, net 5,212,153
—
—
5,236,034
5,236,034
Accrued interest receivable 22,278
22,278
—
—
22,278
Financial liabilities:

Deposits $ 5,575,163
$ —
$ 5,575,288
$ —
$ 5,575,288
Securities sold under agreements to repurchase 53,505
53,505
—
—
53,505
Other borrowings 492,321
—
492,321
—
492,321
Subordinated deferrable interest debentures 84,228
—
67,321
—
67,321
FDIC loss-share payable 6,313
—
—
8,243
8,243
Accrued interest payable 1,501
1,501
—
—
1,501

NOTE 149 – SEGMENT REPORTING

The Company has the following five reportable segments: Banking Division, Retail Mortgage Division, Warehouse Lending Division, SBA Division and Premium Finance Division. The Banking Division derives its revenues from the delivery of full-service financial services, including commercial loans, consumer loans and deposit accounts. The Retail Mortgage Division derives its revenues from the origination, sales and servicing of one-to-four family residential mortgage loans. The Warehouse Lending Division derives its revenues from the origination and servicing of warehouse lines to other businesses that are secured by underlying one-to-four family residential mortgage loans. The SBA Division derives its revenues from the origination, sales and servicing of SBA loans. The Premium Finance Division derives its revenues from the origination and servicing of commercial insurance premium finance loans.

The Banking, Retail Mortgage, Warehouse Lending, SBA and Premium Finance Divisions are managed as separate business units because of the different products and services they provide. The Company evaluates performance and allocates resources based on profit or loss from operations. There are no material intersegment sales or transfers.

The following tables present selected financial information with respect to the Company’s reportable business segments for the three and six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016:~~2022:


	Three Months Ended June 30, 2023
(dollars in thousands)	Banking Division		Retail Mortgage Division		Warehouse Lending Division		SBA Division		Premium Finance Division		Total
Interest income	$	225,284	$	52,867	$	18,960	$	4,915	$	19,926	$	321,952
Interest expense	53,843		31,450		12,794		2,584		11,741		112,412
Net interest income	171,441		21,417		6,166		2,331		8,185		209,540
Provision for credit losses	40,831		3,278		411		424		572		45,516
Noninterest income	24,652		39,808		1,404		1,476		9		67,349
Noninterest expense
Salaries and employee benefits	55,196		21,930		772		1,316		2,122		81,336
Occupancy and equipment	11,175		1,224		—		40		83		12,522
Data processing and communications expenses	11,898		1,397		44		46		66		13,451
Other expenses	27,643		11,859		223		333		1,036		41,094
Total noninterest expense	105,912		36,410		1,039		1,735		3,307		148,403
Income before income tax expense	49,350		21,537		6,120		1,648		4,315		82,970
Income tax expense	13,312		4,523		1,285		346		869		20,335
Net income	$	36,038	$	17,014	$	4,835	$	1,302	$	3,446	$	62,635

Total assets	$	18,274,738	$	4,921,354	$	1,152,690	$	257,350	$	1,194,486	$	25,800,618
Goodwill	951,148		—		—		—		64,498		1,015,646
Other intangible assets, net	89,335		—		—		—		7,465		96,800

Three Months Ended
September 30, 2017
(dollars in thousands) Banking
Division Retail
Mortgage
Division Warehouse
Lending
Division SBA
Division Premium
Finance
Division Total
Interest income $ 59,130
$ 5,862
$ 2,022
$ 1,413
$ 7,895
$ 76,322
Interest expense 5,530
1,597
487
432
1,421
9,467
Net interest income 53,600
4,265
1,535
981
6,474
66,855
Provision for loan losses 1,037
262
215
(1 ) 274
1,787
Noninterest income 13,007
12,257
583
1,130
22
26,999
Noninterest expense

Salaries and employee benefits 20,554
9,792
129
858
1,250
32,583
Equipment and occupancy expenses 5,384
555
1
54
42
6,036
Data processing and telecommunications expenses 6,357
425
28
9
231
7,050
Other expenses 14,905
1,001
51
63
2,078
18,098
Total noninterest expense 47,200
11,773
209
984
3,601
63,767
Income before income tax expense 18,370
4,487
1,694
1,128
2,621
28,300
Income tax expense 4,850
1,475
580
394
843
8,142
Net income $ 13,520
$ 3,012
$ 1,114
$ 734
$ 1,778
$ 20,158

Total assets $ 6,296,159
$ 531,897
$ 236,024
$ 94,531
$ 491,209
$ 7,649,820
Goodwill 125,532
—
—
—
—
125,532
Other intangible assets, net 14,437
—
—
—
—
14,437

Three Months Ended
September 30, 2016
(dollars in thousands)
Banking
Division

Retail
Mortgage
Division

Warehouse
Lending
Division

SBA
Division

Premium
Finance
Division
Total
Interest income $ 55,369
$ 3,679
$ 2,073
$ 1,089
$ —
$ 62,210
Interest expense 3,716
1,054
225
148
—
5,143
Net interest income 51,653
2,625
1,848
941
—
57,067
Provision for loan losses 57
447
94
213
—
811
Noninterest income 13,949
13,198
555
1,162
—
28,864
Noninterest expense

Salaries and employee benefits 18,323
8,940
103
616
—
27,982
Equipment and occupancy expenses 5,490
433
1
65
—
5,989
Data processing and telecommunications expenses 5,794
364
26
1
—
6,185
Other expenses 11,533
1,303
26
181
—
13,043
Total noninterest expense 41,140
11,040
156
863
—
53,199
Income before income tax expense 24,405
4,336
2,153
1,027
—
31,921
Income tax expense 7,733
1,518
754
359
—
10,364
Net income $ 16,672
$ 2,818
$ 1,399
$ 668
$ —
$ 21,557

Total assets $ 5,841,207
$ 356,755
$ 203,334
$ 92,199
$ —
$ 6,493,495
Goodwill 122,545
—
—
—
—
122,545
Other intangible assets, net 18,472
—
—
—
—
18,472


	Three Months Ended June 30, 2022
(dollars in thousands)	Banking Division		Retail Mortgage Division		Warehouse Lending Division		SBA Division		Premium Finance Division		Total
Interest income	$	141,844	$	38,055	$	8,476	$	4,757	$	9,436	$	202,568
Interest expense	(10,278)		17,276		1,776		959		1,471		11,204
Net interest income	152,122		20,779		6,700		3,798		7,965		191,364
Provision for credit losses	10,175		4,499		867		(523)		(94)		14,924
Noninterest income	23,469		57,795		1,041		1,526		10		83,841
Noninterest expense
Salaries and employee benefits	46,733		31,219		208		1,316		2,069		81,545
Occupancy and equipment	11,168		1,406		1		81		90		12,746
Data processing and communications expenses	10,863		1,123		48		29		92		12,155
Other expenses	21,123		12,812		212		539		1,064		35,750
Total noninterest expense	89,887		46,560		469		1,965		3,315		142,196
Income before income tax expense	75,529		27,515		6,405		3,882		4,754		118,085
Income tax expense	19,120		5,779		1,346		815		959		28,019
Net income	$	56,409	$	21,736	$	5,059	$	3,067	$	3,795	$	90,066

Total assets	$	17,009,855	$	4,418,211	$	923,829	$	264,227	$	1,071,348	$	23,687,470
Goodwill	958,558		—		—		—		64,498		1,023,056
Other intangible assets, net	105,198		—		—		—		10,415		115,613


	Six Months Ended June 30, 2023
(dollars in thousands)	Banking Division		Retail Mortgage Division		Warehouse Lending Division		SBA Division		Premium Finance Division		Total
Interest income	$	433,499	$	101,456	$	35,574	$	9,290	$	37,849	$	617,668
Interest expense	86,730		60,012		23,708		5,002		21,024		196,476
Net interest income	346,769		41,444		11,866		4,288		16,825		421,192
Provision for credit losses	87,971		6,131		217		320		606		95,245
Noninterest income	48,550		70,866		1,884		2,081		18		123,399
Noninterest expense
Salaries and employee benefits	111,638		42,090		1,574		2,625		4,319		162,246
Occupancy and equipment	22,781		2,507		1		77		142		25,508
Data processing and communications expenses	23,695		2,466		90		83		151		26,485
Other expenses	46,666		23,606		425		755		2,133		73,585
Total noninterest expense	204,780		70,669		2,090		3,540		6,745		287,824
Income before income tax expense	102,568		35,510		11,443		2,509		9,492		161,522
Income tax expense	26,160		7,457		2,403		527		1,919		38,466
Net income	$	76,408	$	28,053	$	9,040	$	1,982	$	7,573	$	123,056


	Six Months Ended June 30, 2022
(dollars in thousands)	Banking Division		Retail Mortgage Division		Warehouse Lending Division		SBA Division		Premium Finance Division		Total
Interest income	$	271,134	$	70,887	$	15,289	$	11,537	$	17,095	$	385,942
Interest expense	(14,733)		30,813		2,142		1,728		2,084		22,034
Net interest income	285,867		40,074		13,147		9,809		15,011		363,908
Provision for credit losses	15,401		6,086		645		(666)		(311)		21,155
Noninterest income	44,833		119,444		2,442		4,017		16		170,752
Noninterest expense
Salaries and employee benefits	95,928		62,833		491		2,587		3,987		165,826
Occupancy and equipment	22,242		2,877		2		180		172		25,473
Data processing and communications expenses	22,093		2,295		95		57		187		24,727
Other expenses	41,168		25,457		430		919		2,016		69,990
Total noninterest expense	181,431		93,462		1,018		3,743		6,362		286,016
Income before income tax expense	133,868		59,970		13,926		10,749		8,976		227,489
Income tax expense	36,116		12,594		2,925		2,257		1,833		55,725
Net income	$	97,752	$	47,376	$	11,001	$	8,492	$	7,143	$	171,764

NOTE 10 – LOAN SERVICING RIGHTS

The ~~following tables present selected financial information~~Company sells certain residential mortgage loans and SBA loans to third parties. All such transfers are accounted for as sales and the continuing involvement in the loans sold is limited to certain servicing responsibilities. The Company has also acquired servicing portfolios of residential mortgage and SBA loans. Loan servicing rights are initially recorded at fair value and subsequently recorded at the lower of cost or fair value and are amortized over the remaining service life of the loans, with ~~respect~~consideration given to prepayment assumptions. Loan servicing rights are recorded in other assets on the consolidated balance sheets.

The carrying value of the loan servicing rights assets is shown in the table below:


(dollars in thousands)	June 30, 2023		December 31, 2022
Loan Servicing Rights
Residential mortgage	$	160,021	$	147,014
SBA	3,097		3,443

Total loan servicing rights	$	163,118	$	150,457

Residential Mortgage Loans

The Company sells certain first-lien residential mortgage loans to third party investors, primarily the Federal National Mortgage Association (“FNMA”), the Government National Mortgage Association (“GNMA”) and the Federal Home Loan Mortgage Corporation (“FHLMC”). The Company retains the related mortgage servicing rights (“MSRs”) and receives servicing fees on certain of these loans. The net gain on loan sales, MSRs amortization and recoveries/impairment, and ongoing servicing fees on the portfolio of loans serviced for others are recorded in the consolidated statements of income and comprehensive income as part of mortgage banking activity.

During the three- and six-months ended June 30, 2023, the Company recorded servicing fee income of $15.0 million and $29.2 million, respectively. During the three- and six-months ended June 30, 2022, the Company recorded servicing fee income of $18.9 million and $36.3 million, respectively. Servicing fee income includes servicing fees, late fees and ancillary fees earned for each period.

The table below is an analysis of the activity in the Company’s MSRs and valuation allowance:


(dollars in thousands)	Three Months Ended June 30,				Six Months Ended June 30,
Residential mortgage servicing rights	2023		2022		2023		2022
Beginning carrying value, net	$	149,986	$	232,236	$	147,014	$	206,944
Additions	14,731		21,551		22,461		43,252

Amortization	(4,696)		(7,514)		(9,454)		(13,576)
Recoveries	—		10,839		—		20,492

Ending carrying value, net	$	160,021	$	257,112	$	160,021	$	257,112


(dollars in thousands)	Three Months Ended June 30,				Six Months Ended June 30,
Residential mortgage servicing valuation allowance	2023		2022		2023		2022
Beginning balance	$	—	$	16,129	$	—	$	25,782

Recoveries	—		(10,839)		—		(20,492)

Ending balance	$	—	$	5,290	$	—	$	5,290

The key metrics and the sensitivity of the fair value to adverse changes in model inputs and/or assumptions are summarized below:


(dollars in thousands)	June 30, 2023			December 31, 2022
Residential mortgage servicing rights
Unpaid principal balance of loans serviced for others	$	11,373,015		$	10,046,052
Composition of residential loans serviced for others:
FHLMC	17.21		%	16.80		%
FNMA	50.32		%	50.09		%
GNMA	32.47		%	33.11		%
Total	100.00		%	100.00		%
Weighted average term (months)	354			353
Weighted average age (months)	25			22
Modeled prepayment speed	8.47		%	8.22		%
Decline in fair value due to a 10% adverse change	(3,682)			(5,800)
Decline in fair value due to a 20% adverse change	(7,839)			(11,184)
Weighted average discount rate	11.13		%	10.00		%
Decline in fair value due to a 10% adverse change	(4,584)			(6,413)
Decline in fair value due to a 20% adverse change	(10,070)			(12,330)

The sensitivity calculations above are hypothetical and should not be considered to be predictive of future performance. As indicated, changes in fair value based on adverse changes in model inputs and/or assumptions generally cannot be extrapolated because the relationship of a change in input or assumption to the change in fair value may not be linear. In addition, the effect of an adverse variation in a particular input or assumption on the value of the residential mortgage servicing rights is calculated without changing any other input or assumption. In reality, a change in another factor may magnify or counteract the effect of the change in the first.

All sales of SBA loans, consisting of the guaranteed portion, are executed on a servicing retained basis. These loans, which are partially guaranteed by the SBA, are generally secured by business property such as real estate, inventory, equipment and accounts receivable. The net gain on SBA loan sales, amortization and impairment/recoveries of servicing rights, and ongoing servicing fees are recorded in the consolidated statements of income and comprehensive income as part of other noninterest income.

During the three- and six-months ended June 30, 2023, the Company recorded servicing fee income of $758,000 and $1.5 million, respectively. During the three- and six-months ended June 30, 2022, the Company recorded servicing fee income of $1.0 million and $1.9 million, respectively. Servicing fee income includes servicing fees, late fees and ancillary fees earned for each period.

The table below is an analysis of the activity in the Company’s ~~reportable business segments~~SBA loan servicing rights and valuation allowance:


(dollars in thousands)	Three Months Ended June 30,				Six Months Ended June 30,
SBA servicing rights	2023		2022		2023		2022
Beginning carrying value, net	$	3,166	$	5,384	$	3,443	$	5,556
Additions	271		236		315		774


Amortization	(340)		(666)		(661)		(1,376)

Ending carrying value, net	$	3,097	$	4,954	$	3,097	$	4,954


(dollars in thousands)	June 30, 2023			December 31, 2022
SBA servicing rights
Unpaid principal balance of loans serviced for others	$	318,994		$	326,418
Weighted average life (in years)	3.64			3.69
Modeled prepayment speed	18.78		%	18.24		%
Decline in fair value due to a 10% adverse change	(201)			(177)
Decline in fair value due to a 20% adverse change	(385)			(340)
Weighted average discount rate	14.84		%	19.57		%
Decline in fair value due to a 100 basis point adverse change	(92)			(83)
Decline in fair value due to a 200 basis point adverse change	(181)			(163)

The sensitivity calculations above are hypothetical and should not be considered to be predictive of future performance. As indicated, changes in fair value based on adverse changes in model inputs and/or assumptions generally cannot be extrapolated because the relationship of a change in input or assumption to the change in fair value may not be linear. In addition, the effect of an adverse variation in a particular input or assumption on the value of the SBA servicing rights is calculated without changing any other input or assumption. In reality, a change in another factor may magnify or counteract the effect of the change in the first.

NOTE 11 – GOODWILL

The Company has goodwill at its Banking Division and Premium Finance Division (collectively "the divisions"). The carrying value of goodwill at the Banking Division was $951.1 million at both June 30, 2023 and December 31, 2022. The carrying value of goodwill at the Premium Finance Division was $64.5 million at both June 30, 2023 and December 31, 2022. The Company performs its annual impairment test at December 31 of each year and more frequently if a triggering event occurs. At December 31, 2022, the Company performed a qualitative assessment of goodwill at the divisions and determined it was more likely than not that, in each case, the reporting unit's fair value exceeded its carrying value. The Company performed an interim qualitative assessment at March 31, 2023 considering the decline in the Company's stock price relative to book value and the impact of recent bank failures on the economy and again determined that it was more likely than not that each reporting unit's fair value exceeded its carrying value.

During the second quarter of 2023, the Company assessed the indicators of goodwill impairment and determined a triggering event had occurred due to the sustained decline in the Company's stock price. The Company performed a quantitative analysis of goodwill at the divisions as of June 30, 2023. The Premium Finance Division was measured utilizing a discounted cash flow approach. The Banking Division was measured using multiple approaches. The primary approach for the ~~nine months ended September 30, 2017 and 2016:~~

Nine Months Ended
September 30, 2017
(dollars in thousands)
Banking
Division

Retail
Mortgage
Division

Warehouse
Lending
Division

SBA
Division

Premium
Finance
Division
Total
Interest income $ 170,036
$ 14,890
$ 4,968
$ 3,884
$ 21,005
$ 214,783
Interest expense 14,510
4,179
1,074
1,111
3,307
24,181
Net interest income 155,526
10,711
3,894
2,773
17,698
190,602
Provision for loan losses 4,510
617
159
98
444
5,828
Noninterest income 38,974
35,823
1,340
4,663
94
80,894
Noninterest expense

Salaries and employee benefits 58,757
24,771
403
2,339
3,239
89,509
Equipment and occupancy expenses 16,068
1,684
3
159
145
18,059
Data processing and telecommunications expenses 18,778
1,182
80
12
598
20,650
Other expenses 34,355
3,030
137
533
6,326
44,381
Total noninterest expense 127,958
30,667
623
3,043
10,308
172,599
Income before income tax expense 62,032
15,250
4,452
4,295
7,040
93,069
Income tax expense 17,801
5,337
1,559
1,503
2,471
28,671
Net income $ 44,231
$ 9,913
$ 2,893
$ 2,792
$ 4,569
$ 64,398

Nine Months Ended
September 30, 2016
(dollars in thousands)
Banking
Division

Retail
Mortgage
Division

Warehouse
Lending
Division

SBA
Division

Premium
Finance
Division
Total
Interest income $ 158,682
$ 9,992
$ 4,714
$ 2,721
$ —
$ 176,109
Interest expense 10,726
2,383
458
450
—
14,017
Net interest income 147,956
7,609
4,256
2,271
—
162,092
Provision for loan losses 1,471
540
94
276
—
2,381
Noninterest income 39,702
36,126
1,328
4,373
—
81,529
Noninterest expense

Salaries and employee benefits 55,740
23,591
399
1,970
—
81,700
Equipment and occupancy expenses 16,541
1,326
3
190
—
18,060
Data processing and telecommunications expenses 17,299
974
71
3
—
18,347
Other expenses 39,040
3,392
77
542
—
43,051
Total noninterest expense 128,620
29,283
550
2,705
—
161,158
Income before income tax expense 57,567
13,912
4,940
3,663
—
80,082
Income tax expense 18,278
4,870
1,729
1,282
—
26,159
Net income $ 39,289
$ 9,042
$ 3,211
$ 2,381
$ —
$ 53,923

~~NOTE 15 – REGULATORY MATTERS~~

~~On December 16, 2016,~~Banking Division was the ~~Bank entered into a Stipulation to the Issuance of a Consent Order with its bank regulatory agencies, the FDIC~~discounted cash flow approach, and the ~~Georgia Department of Banking~~Company also used a market approach comparing to similar public companies' multiples and Finance (the “GDBF”), consenting to the issuance of a consent order (the “Order”) relating to the Bank’s Bank Secrecy Act (together with its implementing regulations, the “BSA”) compliance program. In consenting to the issuancecontrol premiums from transactions during prior distressed periods. The results from each of the ~~Order, the Bank did not admit or deny any charges of unsafe or unsound banking practices related to its BSA compliance program.~~

~~Under the terms~~primary approaches showed valuation of the ~~Order,~~reporting unit in excess of carrying value at June 30, 2023. The discounted cash flow approach for the ~~Bank or~~Premium Finance Division resulted in a fair value approximately 8% higher than its ~~board~~carrying value. The discounted cash flow approach for the Banking Division indicated a fair value approximately 20% higher than its carrying

value, and the market approach indicated a fair value approximately 9% higher than its carrying value. As a result, management determined no impairment existed at June 30, 2023.

Each of ~~directors is required to take certain affirmative actions to comply with~~ the Bank’s obligations under the BSA. These include, but are not limited to, the following: strengthening the board of directors’ oversight of BSA activities; enhancing and adopting a revised BSA compliance program; completing a BSA risk assessment; developing a revised system of internal controls designed to ensure full compliance with the BSA; reviewing and revising customer due diligence and risk assessment processes, policies and procedures; developing, adopting and implementing effective BSA training programs; assessing BSA staffing needs and resources and appointing a qualified BSA officer; establishing an independent BSA testing program; ensuring that all reports requiredvaluation methods used by the ~~BSA~~Company requires significant assumptions. Depending on the specific method, assumptions are ~~accurately~~made regarding growth rates, discount rates for cash flows, control premiums, and ~~properly filed; and engaging an independent firm~~selected multiples. Changes to ~~review past account activity to determine whether suspicious activity was properly identified and reported.~~

~~Prior to implementation, certain~~any of the ~~actions required by the Order were subject to review by, and approval or non-objection from, the FDIC and the GDBF. The Order will remain~~assumptions could result in ~~effect and be enforceable until it is modified, terminated, suspended or~~significantly different results.

set aside by the FDIC and the GDBF. The Bank expects that it will continue to meet the required actions within the time periods specified in the Order based upon ongoing communications with its regulators.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Cautionary Note Regarding Forward-Looking Statements

Certain of the statements made in this report are “forward-looking statements” within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions and future performance and involve known and unknown risks, uncertainties and other factors, many of which may be beyond our control and which may cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements.

All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as “may,” “will,” “anticipate,” “assume,” “should,” “indicate,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “plan,” “point to,” “project,” “predict,” “could,” “intend,” “target,” “potential” and other similar words and expressions of the future. These forward-looking statements may not be realized due to a variety of factors, including, without limitation, the following: general competitive, economic, unemployment, political and market conditions and fluctuations, including real estate market conditions, and the effects of such conditions and fluctuations on the creditworthiness of borrowers, collateral values, asset recovery values and the value of investment securities; movements in interest rates and their impacts on net interest margin; expectations on credit quality and performance; competitive pressures on product pricing and services; legislative and regulatory ~~initiatives;~~changes; changes in U.S. government monetary and fiscal policy; investment security valuation and other performance measures; the potential impact of the phase-out of the London Interbank Offered Rate ("LIBOR") or other changes involving LIBOR; additional competition in our markets; ~~potential business strategies, including acquisitions or dispositions of assets or internal restructuring, that may be pursued by us;~~changes in state and federal banking ~~regulations; changes in or application of environmental and other~~ laws and regulations to which we are subject; ~~political, legal and economic conditions and developments;~~ financial market conditions and the results of financing efforts; ~~changes in commodity prices~~the cost savings and ~~interest rates;~~any revenue synergies expected to result from acquisition transactions, which may not be fully realized within the expected timeframes if at all; the success and timing of other business strategies; our outlook and long-term goals for future growth; weather events, natural disasters, geopolitical events, acts of war or terrorism or other hostilities, public health crises and other catastrophic ~~events;~~events beyond our control; and other factors discussed in our filings with the Securities and Exchange Commission (the “SEC”) under the Exchange Act.

All written or oral forward-looking statements that are made by or are attributable to us are expressly qualified in their entirety by this cautionary notice. Our forward-looking statements apply only as of the date of this report or the respective date of the document from which they are incorporated herein by reference. We have no obligation and do not undertake to update, revise or correct any of the forward-looking statements after the date of this report, or after the respective dates on which such statements otherwise are made, whether as a result of new information, future events or otherwise.

Overview

The following is management’s discussion and analysis of certain significant factors which have affected the financial condition and results of operations of the Company as reflected in the unaudited consolidated balance sheet as of ~~September~~June 30, ~~2017,~~2023, as compared with December 31, ~~2016,~~2022, and operating results for the three- and ~~nine-month~~six-month periods ended ~~September~~June 30, ~~2017~~2023 and ~~2016.~~2022. These comments should be read in conjunction with the Company’s unaudited consolidated financial statements and accompanying notes appearing elsewhere herein.

This discussion contains certain performance measures determined by methods other than in accordance with ~~accounting principles generally accepted in the United States of America (“GAAP”).~~GAAP. Management of the Company uses these non-GAAP measures in its analysis of the Company’s performance. These measures are useful when evaluating the underlying performance and efficiency of the Company’s operations and balance sheet. The Company’s management believes that these non-GAAP measures provide a greater understanding of ongoing operations, enhance comparability of results with prior periods and demonstrate the effects of significant gains and charges in the current period. The Company’s management believes that investors may use these non-GAAP financial measures to evaluate the Company’s financial performance without the impact of unusual items that may obscure trends in the Company’s underlying performance. These disclosures should not be viewed as a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Non-GAAP measures include ~~tangible common equity, tangible book value per common share,~~ adjusted ~~operating~~ net income and adjusted ~~operating~~ net income per diluted share. The Company calculates the regulatory capital ratios using current regulatory report instructions. The Company’s management uses these measures to assess the quality of capital and believes that investors may find them useful in their evaluation of the Company. These capital measures may or may not be necessarily comparable to similar capital measures that may be presented by other companies.

Critical Accounting Policies

There have been no significant changes to our critical accounting policies from those disclosed in our 2022 Annual Report on Form 10-K, except as described below. The ~~following table sets forth unaudited selected financial data for~~reader should refer to the ~~previous five quarters. This data should be read in conjunction with the unaudited~~notes to our consolidated financial statements in our 2022 Annual Report on Form 10-K for a full disclosure of all critical accounting policies.

Long-Lived Assets, Including Intangibles

Goodwill represents the excess of cost over the fair value of the net assets purchased in business combinations. Goodwill is required to be tested annually for impairment or whenever events occur that may indicate that the recoverability of the carrying amount is not probable. In the event of an impairment, the amount by which the carrying amount exceeds the fair value is charged to earnings. The Company performs its annual impairment testing of goodwill in the fourth quarter of each year.

Intangible assets include core deposit premiums from various past bank acquisitions as well as intangible assets recorded in connection with the certain non-bank acquisitions for referral relationships, trade names, non-compete agreements and patent assets. Intangible assets are initially recognized based on a valuation performed as of the ~~notes thereto~~acquisition date.

Core deposit premiums acquired in various past bank acquisitions are based on the established value of acquired customer deposits. The core deposit premium is initially recognized based on a valuation performed as of the acquisition date and is amortized over an estimated useful life of seven to ten years.

The referral relationships intangible is amortized over an estimated useful life of eight to ten years. Trade name intangible assets are being amortized over an estimated useful life of five to seven years. Non-compete agreement and patent intangible assets are being amortized over estimated useful lives of three years and ten years, respectively.

The valuation of intangible assets involves significant forward looking assumptions such as economic conditions, market interest rates, asset growth rates, credit losses, etc. Changes in any of these assumptions could materially affect the ~~information contained~~valuation of the intangible assets.

Amortization periods for intangible assets are reviewed annually in ~~this Item 2.~~connection with the annual impairment testing of goodwill.

Nine Months Ended
(in thousands, except share and per share data) Third
Quarter
2017 Second
Quarter
2017 First
Quarter
2017 Fourth
Quarter
2016 Third
Quarter
2016 September 30,
2017 September 30,
2016
Results of Operations:
Net interest income $ 66,855
$ 63,157
$ 60,590
$ 57,279
$ 57,067
$ 190,602
$ 162,092
Net interest income (tax equivalent) 68,668
64,773
62,108
58,897
58,024
195,549
164,726
Provision for loan losses 1,787
2,205
1,836
1,710
811
5,828
2,381
Non-interest income 26,999
28,189
25,706
24,272
28,864
80,894
81,529
Non-interest expense 63,767
55,739
53,093
54,677
53,199
172,599
161,158
Income tax expense 8,142
10,315
10,214
6,987
10,364
28,671
26,159
Net income available to common shareholders 20,158
23,087
21,153
18,177
21,557
64,398
53,923
Selected Average Balances:

Investment securities $ 864,456
$ 866,960
$ 862,616
$ 856,671
$ 857,433
$ 864,684
$ 840,688
Loans held for sale 126,798
110,933
77,617
102,926
105,859
105,296
96,340
Loans 4,379,082
3,994,213
3,678,149
3,145,714
2,897,771
4,018,597
2,642,498
Purchased loans 937,595
973,521
1,034,983
1,101,907
1,199,175
982,033
1,147,821
Purchased loan pools 475,742
516,949
547,057
590,617
629,666
513,750
629,118
Earning assets 6,892,939
6,584,386
6,347,807
5,925,634
5,780,455
6,610,374
5,490,525
Assets 7,461,367
7,152,024
6,915,965
6,573,344
6,330,350
7,180,330
6,030,181
Deposits 5,837,154
5,671,394
5,491,324
5,490,657
5,221,219
5,667,891
5,102,729
Shareholders’ equity 796,856
774,664
695,830
653,991
640,382
756,153
599,817
Period-End Balances:

Investment securities $ 867,570
$ 861,188
$ 866,715
$ 852,199
$ 862,702
$ 867,570
$ 862,702
Loans held for sale 137,392
146,766
105,637
105,924
126,263
137,392
126,263
Loans 4,574,678
4,230,228
3,785,480
3,626,821
3,091,039
4,574,678
3,091,039
Purchased loans 917,126
950,499
1,006,935
1,069,191
1,129,381
917,126
1,129,381
Purchased loan pools 465,218
490,114
529,099
568,314
624,886
465,218
624,886
Earning assets 7,074,828
6,816,606
6,525,911
6,293,670
5,925,072
7,074,828
5,925,072
Total assets 7,649,820
7,397,858
7,094,856
6,892,031
6,493,495
7,649,820
6,493,495
Deposits 5,895,504
5,793,397
5,642,369
5,575,163
5,306,098
5,895,504
5,306,098
Shareholders’ equity 801,921
782,682
758,216
646,437
642,583
801,921
642,583
Per Common Share Data:

Earnings per share - basic $ 0.54
0.62
0.59
0.52
0.62
1.76
1.58
Earnings per share - diluted $ 0.54
0.62
0.59
0.52
0.61
1.74
1.56
Book value per common share $ 21.54
$ 21.03
$ 20.42
$ 18.51
$ 18.42
$ 21.54
$ 18.42
Tangible book value per common share $ 17.78
$ 17.24
$ 16.60
$ 14.42
$ 14.38
$ 17.78
$ 14.38
End of period shares outstanding 37,231,049
37,222,904
37,128,714
34,921,474
34,891,304
37,231,049
34,891,304

Nine Months Ended
(in thousands, except share and per share data) Third
Quarter
2017 Second
Quarter
2017 First
Quarter
2017 Fourth
Quarter
2016 Third
Quarter
2016 September 30,
2017 September 30,
2016
Weighted Average Shares Outstanding:

Basic 37,225,418
37,162,810
35,664,420
34,915,459
34,869,747
36,689,934
34,155,556
Diluted 37,552,667
37,489,348
36,040,240
35,293,035
35,194,739
37,017,486
34,470,101
Market Price:

High intraday price $ 51.28
$ 49.80
$ 49.50
$ 47.70
$ 36.20
$ 51.28
$ 36.20
Low intraday price $ 41.05
$ 42.60
$ 41.60
$ 34.61
$ 28.90
$ 41.05
$ 24.96
Closing price for quarter $ 48.00
$ 48.20
$ 46.10
$ 43.60
$ 34.95
$ 48.00
$ 34.95
Average daily trading volume 168,911
169,617
242,982
191,894
166,841
193,555
211,351
Cash dividends declared per share $ 0.10
$ 0.10
$ 0.10
$ 0.10
$ 0.10
$ 0.30
$ 0.20
Closing price to book value 2.23
2.29
2.26
2.36
1.90
2.23
1.90
Performance Ratios:

Return on average assets 1.07 % 1.29 % 1.24 % 1.10 % 1.35 % 1.20 % 1.19 %
Return on average common equity 10.04 % 11.95 % 12.33 % 11.06 % 13.39 % 11.39 % 12.01 %
Average loans to average deposits 101.41 % 98.66 % 97.20 % 89.99 % 92.55 % 99.15 % 88.50 %
Average equity to average assets 10.68 % 10.83 % 10.06 % 9.95 % 10.12 % 10.53 % 9.95 %
Net interest margin (tax equivalent) 3.95 % 3.95 % 3.97 % 3.95 % 3.99 % 3.96 % 4.01 %
Efficiency ratio 67.94 % 61.02 % 61.52 % 67.05 % 61.91 % 63.57 % 66.15 %

Non-GAAP Measures Reconciliation -

Tangible book value per common share:

Total shareholders’ equity $ 801,921
$ 782,682
$ 758,216
$ 646,437
$ 642,583
$ 801,921
$ 642,583
Less:

Goodwill 125,532
125,532
125,532
125,532
122,545
125,532
122,545
Other intangible assets, net 14,437
15,378
16,391
17,428
18,472
14,437
18,472
Tangible common equity $ 661,952
$ 641,772
$ 616,293
$ 503,477
$ 501,566
$ 661,952
$ 501,566
End of period shares outstanding 37,231,049
37,222,904
37,128,714
34,921,474
34,891,304
37,231,049
34,891,304
Book value per common share $ 21.54
$ 21.03
$ 20.42
$ 18.51
$ 18.42
$ 21.54
$ 18.42
Tangible book value per common share 17.78
17.24
16.60
14.42
14.38
17.78
14.38

Results of Operations for the Three Months Ended ~~September~~June 30, ~~2017~~2023 and ~~2016~~2022

Consolidated Earnings and Profitability

Ameris reported net income available to common shareholders of ~~$20.2~~$62.6 million, or ~~$0.54~~$0.91 per diluted share, for the quarter ended ~~September~~June 30, ~~2017,~~2023, compared with ~~$21.6~~$90.1 million, or ~~$0.61~~$1.30 per diluted share, for the same period in ~~2016.~~2022. The Company’s return on average assets and average shareholders’ equity were ~~1.07%~~0.98% and ~~10.04%~~7.63%, respectively, in the ~~third~~second quarter of ~~2017,~~2023, compared with ~~1.35%~~1.54% and ~~13.39%~~11.87%, respectively, in the ~~third~~second quarter of ~~2016.~~2022. During the ~~third~~second quarter of ~~2017~~2022, the Company ~~incurred~~recorded pre-tax ~~merger and conversion charges~~servicing right impairment recovery of ~~$92,000, pre-tax BSA compliance resolution expenses of $4.7~~$10.8 million ~~pre-tax Hurricane Irma expenses of $410,000,~~ and pre-tax ~~losses~~gain on ~~the sale of~~bank premises of ~~$91,000. During the third quarter of 2016, the Company incurred pre-tax losses on the sale of premises of $238,000.~~$39,000. Excluding these ~~merger and conversion charges, compliance resolution expenses, Hurricane Irma expenses, and losses on the sale of premises,~~adjustment items, the Company’s net income would have been ~~$23.6~~$81.5 million, or ~~$0.63~~$1.18 per diluted share, for the ~~third~~second quarter of ~~2017 and $21.7 million, or $0.62 per diluted share, for the third quarter of 2016.~~2022.

Below is a reconciliation of adjusted ~~operating~~ net income to net income, as discussed above.


	Three Months Ended June 30,
(in thousands, except share and per share data)	2023		2022
Net income	$	62,635	$	90,066
Adjustment items:



Servicing right impairment (recovery)	—		(10,838)



Gain on bank premises	—		(39)
Tax effect of adjustment items (Note 1)	—		2,284
After tax adjustment items	—		(8,593)
Adjusted net income	$	62,635	$	81,473

Weighted average common shares outstanding - diluted	69,034,763		69,316,258
Net income per diluted share	$	0.91	$	1.30
Adjusted net income per diluted share	$	0.91	$	1.18

Note 1: Tax effect is calculated utilizing a 21% rate for taxable adjustments.

Three Months Ended September 30, Nine Months Ended September 30,
(in thousands, except share and per share data) 2017 2016 2017 2016
Net income available to common shareholders $ 20,158
$ 21,557
$ 64,398
$ 53,923
Adjustment items:

Merger and conversion charges 92
—
494
6,359
Certain compliance resolution expenses 4,729
—
4,729
—
Financial impact of Hurricane Irma 410
—
410
—
Losses on the sale of premises 91
238
956
562
Tax effect of management adjusted charges (1,863 ) (83 ) (2,306 ) (2,422 )
After tax management-adjusted charges 3,459
155
4,283
4,499
Adjusted operating net income $ 23,617
$ 21,712
$ 68,681
$ 58,422

Weighted average common shares outstanding - diluted 37,552,667
35,194,739
37,017,486
34,470,101
Earnings per diluted share $ 0.54
$ 0.61
$ 1.74
$ 1.56
Adjusted operating net income per diluted share $ 0.63
$ 0.62
$ 1.86
$ 1.69

Below is additional information regarding the retail banking activities, mortgage banking activities, warehouse lending activities, SBA activities and premium finance activities of the Company during the ~~third~~second quarter of ~~2017~~2023 and ~~2016,~~2022, respectively:


	Three Months Ended September 30, 2017														Three Months Ended June 30, 2023
(dollars in thousands)	Banking Division		Retail Mortgage Division		Warehouse Lending Division		SBA Division			Premium Finance Division		Total		(dollars in thousands)	Banking Division		Retail Mortgage Division		Warehouse Lending Division		SBA Division		Premium Finance Division		Total
Interest income	$	59,130	$	5,862	$	2,022	$	1,413		$	7,895	$	76,322	Interest income	$	225,284	$	52,867	$	18,960	$	4,915	$	19,926	$	321,952
Interest expense	5,530		1,597		487		432			1,421		9,467		Interest expense	53,843		31,450		12,794		2,584		11,741		112,412
Net interest income	53,600		4,265		1,535		981			6,474		66,855		Net interest income	171,441		21,417		6,166		2,331		8,185		209,540
Provision for loan losses	1,037		262		215		(1		)	274		1,787
Provision for credit losses														Provision for credit losses	40,831		3,278		411		424		572		45,516
Noninterest income	13,007		12,257		583		1,130			22		26,999		Noninterest income	24,652		39,808		1,404		1,476		9		67,349
Noninterest expense														Noninterest expense
Salaries and employee benefits	20,554		9,792		129		858			1,250		32,583		Salaries and employee benefits	55,196		21,930		772		1,316		2,122		81,336
Equipment and occupancy expenses	5,384		555		1		54			42		6,036
Data processing and telecommunications expenses	6,357		425		28		9			231		7,050
Occupancy and equipment														Occupancy and equipment	11,175		1,224		—		40		83		12,522
Data processing and communications expenses														Data processing and communications expenses	11,898		1,397		44		46		66		13,451
Other expenses	14,905		1,001		51		63			2,078		18,098		Other expenses	27,643		11,859		223		333		1,036		41,094
Total noninterest expense	47,200		11,773		209		984			3,601		63,767		Total noninterest expense	105,912		36,410		1,039		1,735		3,307		148,403
Income before income tax expense	18,370		4,487		1,694		1,128			2,621		28,300		Income before income tax expense	49,350		21,537		6,120		1,648		4,315		82,970
Income tax expense	4,850		1,475		580		394			843		8,142		Income tax expense	13,312		4,523		1,285		346		869		20,335
Net income	$	13,520	$	3,012	$	1,114	$	734		$	1,778	$	20,158	Net income	$	36,038	$	17,014	$	4,835	$	1,302	$	3,446	$	62,635


	Three Months Ended September 30, 2016													Three Months Ended June 30, 2022
(dollars in thousands)	Banking Division		Retail Mortgage Division		Warehouse Lending Division		SBA Division		Premium Finance Division		Total		(dollars in thousands)	Banking Division		Retail Mortgage Division		Warehouse Lending Division		SBA Division		Premium Finance Division		Total
Interest income	$	55,369	$	3,679	$	2,073	$	1,089	$	—	$	62,210	Interest income	$	141,844	$	38,055	$	8,476	$	4,757	$	9,436	$	202,568
Interest expense	3,716		1,054		225		148		—		5,143		Interest expense	(10,278)		17,276		1,776		959		1,471		11,204
Net interest income	51,653		2,625		1,848		941		—		57,067		Net interest income	152,122		20,779		6,700		3,798		7,965		191,364
Provision for loan losses	57		447		94		213		—		811
Provision for credit losses													Provision for credit losses	10,175		4,499		867		(523)		(94)		14,924
Noninterest income	13,949		13,198		555		1,162		—		28,864		Noninterest income	23,469		57,795		1,041		1,526		10		83,841
Noninterest expense													Noninterest expense
Salaries and employee benefits	18,323		8,940		103		616		—		27,982		Salaries and employee benefits	46,733		31,219		208		1,316		2,069		81,545
Equipment and occupancy expenses	5,490		433		1		65		—		5,989
Data processing and telecommunications expenses	5,794		364		26		1		—		6,185
Occupancy and equipment													Occupancy and equipment	11,168		1,406		1		81		90		12,746
Data processing and communications expenses													Data processing and communications expenses	10,863		1,123		48		29		92		12,155
Other expenses	11,533		1,303		26		181		—		13,043		Other expenses	21,123		12,812		212		539		1,064		35,750
Total noninterest expense	41,140		11,040		156		863		—		53,199		Total noninterest expense	89,887		46,560		469		1,965		3,315		142,196
Income before income tax expense	24,405		4,336		2,153		1,027		—		31,921		Income before income tax expense	75,529		27,515		6,405		3,882		4,754		118,085
Income tax expense	7,733		1,518		754		359		—		10,364		Income tax expense	19,120		5,779		1,346		815		959		28,019
Net income	$	16,672	$	2,818	$	1,399	$	668	$	—	$	21,557	Net income	$	56,409	$	21,736	$	5,059	$	3,067	$	3,795	$	90,066

Net Interest Income and Margins

The following table sets forth the average balance, interest income or interest expense, and average interest rate for each category of interest-earning assets and interest-bearing liabilities, net interest spread, and net interest margin on average interest-earning assets for the three months ended June 30, 2023 and 2022. Federally tax-exempt income is presented on a taxable-equivalent basis assuming a 21% federal tax rate.


	Quarter Ended June 30,
	2023					2022
(dollars in thousands)	Average Balance		Interest Income/ Expense		Average Yield/ Rate Paid	Average Balance		Interest Income/ Expense		Average Yield/ Rate Paid
Assets
Interest-earning assets:
Federal funds sold, interest-bearing deposits in banks, and time deposits in other banks	$	998,609	$	13,686	5.50%	$	2,227,453	$	4,495	0.81%
Investment securities	1,741,676		16,345		3.76%	1,021,610		7,405		2.91%
Loans held for sale	577,606		8,398		5.83%	944,964		10,036		4.26%
Loans	20,164,938		284,471		5.66%	16,861,674		181,602		4.32%
Total interest-earning assets	23,482,829		322,900		5.52%	21,055,701		203,538		3.88%
Noninterest-earning assets	2,149,017					2,349,500
Total assets	$	25,631,846				$	23,405,201

Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
Savings and interest-bearing demand deposits	$	9,962,189	$	55,523	2.24%	$	9,790,029	$	3,590	0.15%
Time deposits	3,417,220		32,564		3.82%	1,693,740		1,318		0.31%
Securities sold under agreements to repurchase	—		—		—%	1,854		1		0.22%
FHLB advances	1,408,855		17,222		4.90%	48,746		192		1.58%
Other borrowings	316,626		3,902		4.94%	376,829		4,437		4.72%
Subordinated deferrable interest debentures	129,056		3,201		9.95%	127,063		1,666		5.26%
Total interest-bearing liabilities	15,233,946		112,412		2.96%	12,038,261		11,204		0.37%
Demand deposits	6,729,789					7,955,765
Other liabilities	375,062					367,895
Shareholders’ equity	3,293,049					3,043,280
Total liabilities and shareholders’ equity	$	25,631,846				$	23,405,201
Interest rate spread					2.56%					3.51%
Net interest income			$	210,488				$	192,334
Net interest margin					3.60%					3.66%

On a tax-equivalent basis, net interest income for the second quarter of 2023 was $210.5 million, an increase of $18.2 million, or 9.4%, compared with $192.3 million reported in the same quarter in 2022. The higher net interest income is primarily a result of growth in investment securities and loans, partially offset by increased cost of funds as market interest rates have risen. Average interest earning assets increased $2.43 billion, or 11.5%, from $21.06 billion in the second quarter of 2022 to $23.48 billion for the second quarter of 2023. This growth in interest-earning assets resulted primarily from organic loan growth and securities purchases, partially offset by a decline in excess liquidity. The Company’s net interest margin during the second quarter of 2023 was 3.60%, down six basis points from 3.66% reported in the second quarter of 2022. Loan production in the lines of business (including retail mortgage, warehouse lending, SBA and premium finance) amounted to $4.7 billion during the second quarter of 2023, with weighted average yields of6.83%, compared with $5.3 billion and 4.29%, respectively, during the second quarter of 2022. Loan production in the banking division amounted to $544.3 million during the second quarter of 2023, with weighted average yields of 9.35%, compared with $1.1 billion and 5.24%, respectively, during the second quarter of 2022.

Total interest income, on a tax-equivalent basis, increased to $322.9 million during the second quarter of 2023, compared with $203.5 million in the same quarter of 2022. Yields on earning assets increased to 5.52% during the second quarter of 2023, compared with 3.88% reported in the second quarter of 2022. During the second quarter of 2023, loans comprised 88.3% of average earning assets, compared with 84.6% in the same quarter of 2022. Yields on loans increased to 5.66% in the second quarter of 2023, compared with 4.32% in the same period of 2022.

The yield on total interest-bearing liabilities increased from 0.37% in the second quarter of 2022 to 2.96% in the second quarter of 2023. Total funding costs, inclusive of noninterest-bearing demand deposits, increased to 2.05% in the second quarter of 2023, compared with 0.22% during the second quarter of 2022. Deposit costs increased from 0.10% in the second quarter of 2022 to 1.76% in the second quarter of 2023. Non-deposit funding costs increased from 4.55% in the second quarter of 2022 to 5.26% in the second quarter of 2023. Average balances of interest-bearing deposits and their respective costs for the second quarter of 2023 and 2022 are shown below:


	Three Months Ended June 30, 2023			Three Months Ended June 30, 2022
(dollars in thousands)	Average Balance		Average Cost	Average Balance		Average Cost
NOW	$	3,949,850	1.83%	$	3,695,490	0.14%
MMDA	5,002,590		2.82%	5,087,199		0.17%
Savings	1,009,749		0.91%	1,007,340		0.06%
Retail CDs	2,024,014		2.92%	1,693,740		0.31%
Brokered CDs	1,393,206		5.13%	—		—%
Interest-bearing deposits	$	13,379,409	2.64%	$	11,483,769	0.17%

Provision for Credit Losses

The Company’s provision for credit losses during the second quarter of 2023 amounted to $45.5 million, compared with $14.9 million in the second quarter of 2022. This increase was attributable to the updated economic forecast and organic growth in loans during the quarter. The provision for credit losses for the second quarter of 2023 was comprised of $43.6 million related to loans and $1.9 million related to unfunded commitments, compared with $13.2 million related to loans, $1.8 million related to unfunded commitments and negative $82,000 related to other credit losses for the second quarter of 2022. Non-performing assets as a percentage of total assets decreased four basis points to 0.57% at June 30, 2023, compared with 0.61% at December 31, 2022. The decrease in non-performing assets is primarily attributable to decreases in nonaccruing loans of $8.1 million and accruing loans delinquent 90 days or more of $4.4 million, partially offset by an increase in other real estate owned of $5.3 million. The Company recognized net charge-offs on loans during the second quarter of 2023 of approximately $14.2 million, or 0.28% of average loans on an annualized basis, compared with net charge-offs of approximately $1.8 million, or 0.04%, in the second quarter of 2022. Approximately $2.3 million of net charge-offs for the second quarter of 2023 related to acquired loans which were fully reserved at the acquisition date. The Company’s total allowance for credit losses on loans at June 30, 2023 was $272.1 million, or 1.33% of total loans, compared with $205.7 million, or 1.04% of total loans, at December 31, 2022. This increase is primarily attributable to updated forecast economic conditions.

Total noninterest income for the second quarter of 2023 was $67.3 million, a decrease of $16.5 million, or 19.7%, from the $83.8 million reported in the second quarter of 2022. Income from mortgage banking activities was $40.7 million in the second quarter of 2023, a decrease of $18.0 million, or 30.7%, from $58.8 million in the second quarter of 2022. Total production in the second quarter of 2023 amounted to $1.33 billion, compared with $1.73 billion in the same quarter of 2022, while spread (gain on sale) decreased to 2.18% in the current quarter, compared with 2.36% in the same quarter of 2022. Mortgage banking activities for the second quarter of 2022 were positively impacted by a recovery of prior mortgage servicing right impairment of $10.8 million, compared with no such recovery in the second quarter of 2023 The retail mortgage open pipeline finished the second quarter of 2023 at $652.1 million, compared with $725.9 million at March 31, 2023 and $832.3 million at the end of the second quarter of 2022.

Service charges on deposit accounts increased $147,000, or 1.3%, to $11.3 million in the second quarter of 2023, compared with $11.1 million in the second quarter of 2022. Other noninterest income increased $1.7 million, or 13.1%, to $14.3 million for the second quarter of 2023, compared with $12.7 million during the second quarter of 2022. The increase in other noninterest income was primarily attributable to increased gain on debt redemption, derivative fee income and BOLI income of $1.0 million, $536,000 and $335,000, respectively.

Total noninterest expense for the second quarter of 2023 increased $6.2 million, or 4.4%, to $148.4 million, compared with $142.2 million in the same quarter 2022. Salaries and employee benefits decreased $209,000, or 0.3%, from $81.5 million in the second quarter of 2022 to $81.3 million in the second quarter of 2023, due primarily to decreases in variable commissions tied to mortgage production of $6.2 million, and incentive compensation of $2.9 million, partially offset by a decline in deferred

origination costs of $7.4 million and increases in stock compensation of $686,000 and retirement expenses of $300,000. Occupancy and equipment expenses decreased $224,000, or 1.8%, to $12.5 million for the second quarter of 2023, compared with $12.7 million in the second quarter of 2022. Data processing and communications expenses increased $1.3 million, or 10.7%, to $13.5 million in the second quarter of 2023, compared with $12.2 million in the second quarter of 2022. Advertising and marketing expense was $2.6 million in the second quarter of 2023, compared with $3.1 million in the second quarter of 2022. This decrease was primarily related to a marketing campaign begun in the second quarter of 2022 which was narrowed in the second quarter of 2023. Amortization of intangible assets decreased $456,000, or 8.9%, from $5.1 million in the second quarter of 2022 to $4.7 million in the second quarter of 2023. This decrease was primarily related to a reduction in core deposit intangible amortization. Loan servicing expenses decreased $1.1 million, or 11.6%, from $9.9 million in the second quarter of 2022 to $8.8 million in the second quarter of 2023, primarily attributable to the sale of a portion of our mortgage servicing portfolio during the third quarter of 2022, partially offset by additional mortgage loans serviced added from mortgage production over the previous year. Other noninterest expenses increased $7.1 million, or 41.6%, from $17.1 million in the second quarter of 2022 to $24.2 million in the second quarter of 2023, due primarily to increases of $3.1 million in FDIC insurance expense, $957,000 in loan related expenses, $1.9 million in other losses and $1.2 million in legal and professional fees.

Income tax expense is influenced by the statutory rate, the amount of taxable income, the amount of tax-exempt income and the amount of nondeductible expenses. For the second quarter of 2023, the Company reported income tax expense of $20.3 million, compared with $28.0 million in the same period of 2022. The Company’s effective tax rate for the three months ended June 30, 2023 and 2022 was 24.5% and 23.7%, respectively. The increase in the effective tax rate is primarily a result of increased nondeductible FDIC insurance and compensation expenses compared with the same period in 2022.

Results of Operations for the Six Months Ended June 30, 2023 and 2022

Consolidated Earnings and Profitability

Ameris reported net income available to common shareholders of $123.1 million, or $1.78 per diluted share, for the six months ended June 30, 2023, compared with $171.8 million, or $2.47 per diluted share, for the same period in 2022. The Company’s return on average assets and average shareholders’ equity were 0.98% and 7.58%, respectively, in the six months ended June 30, 2023, compared with 1.48% and 11.47%, respectively, in the same period in 2022. During the first six months of 2023, the Company recorded pre-tax gain on BOLI proceeds of $486,000. During the first six months of 2022, the Company recorded pre-tax merger and conversion charges of $977,000, pre-tax servicing right recovery of $20.5 million and pre-tax loss on bank premises of $45,000. Excluding these adjustment items, the Company’s net income would have been $122.6 million, or $1.77 per diluted share, for the six months ended June 30, 2023 and $156.5 million, or $2.25 per diluted share, for the same period in 2022.

Below is a reconciliation of adjusted net income to net income, as discussed above.


	Six Months Ended June 30,
(in thousands, except share and per share data)	2023		2022
Net income available to common shareholders	$	123,056	$	171,764
Adjustment items:
Merger and conversion charges	—		977


Servicing right recovery	—		(20,492)
Gain on BOLI proceeds	(486)		—


(Gain) loss on bank premises	—		(45)
Tax effect of adjustment items (Note 1)	—		4,308
After tax adjustment items	(486)		(15,252)
Adjusted net income	$	122,570	$	156,512

Weighted average common shares outstanding - diluted	69,191,512		69,484,508
Net income per diluted share	$	1.78	$	2.47
Adjusted net income per diluted share	$	1.77	$	2.25

Note 1: Tax effect is calculated utilizing a 21% rate for taxable adjustments. Gain on BOLI proceeds is non-taxable and no tax effect is included. A portion of the merger and conversion charges for the six months ended June 30, 2022 is nondeductible for tax purposes.

Below is additional information regarding the retail banking activities, mortgage banking activities, warehouse lending activities, SBA activities and premium finance activities of the Company during the six months ended June 30, 2023 and 2022, respectively:


	Six Months Ended June 30, 2023
(dollars in thousands)	Banking Division		Retail Mortgage Division		Warehouse Lending Division		SBA Division		Premium Finance Division		Total
Interest income	$	433,499	$	101,456	$	35,574	$	9,290	$	37,849	$	617,668
Interest expense	86,730		60,012		23,708		5,002		21,024		196,476
Net interest income	346,769		41,444		11,866		4,288		16,825		421,192
Provision for loan losses	87,971		6,131		217		320		606		95,245
Noninterest income	48,550		70,866		1,884		2,081		18		123,399
Noninterest expense
Salaries and employee benefits	111,638		42,090		1,574		2,625		4,319		162,246
Occupancy and equipment	22,781		2,507		1		77		142		25,508
Data processing and communications expenses	23,695		2,466		90		83		151		26,485
Other expenses	46,666		23,606		425		755		2,133		73,585
Total noninterest expense	204,780		70,669		2,090		3,540		6,745		287,824
Income before income tax expense	102,568		35,510		11,443		2,509		9,492		161,522
Income tax expense	26,160		7,457		2,403		527		1,919		38,466
Net income	$	76,408	$	28,053	$	9,040	$	1,982	$	7,573	$	123,056


	Six Months Ended June 30, 2022
(dollars in thousands)	Banking Division		Retail Mortgage Division		Warehouse Lending Division		SBA Division		Premium Finance Division		Total
Interest income	$	271,134	$	70,887	$	15,289	$	11,537	$	17,095	$	385,942
Interest expense	(14,733)		30,813		2,142		1,728		2,084		22,034
Net interest income	285,867		40,074		13,147		9,809		15,011		363,908
Provision for loan losses	15,401		6,086		645		(666)		(311)		21,155
Noninterest income	44,833		119,444		2,442		4,017		16		170,752
Noninterest expense
Salaries and employee benefits	95,928		62,833		491		2,587		3,987		165,826
Occupancy and equipment	22,242		2,877		2		180		172		25,473
Data processing and communications expenses	22,093		2,295		95		57		187		24,727
Other expenses	41,168		25,457		430		919		2,016		69,990
Total noninterest expense	181,431		93,462		1,018		3,743		6,362		286,016
Income before income tax expense	133,868		59,970		13,926		10,749		8,976		227,489
Income tax expense	36,116		12,594		2,925		2,257		1,833		55,725
Net income	$	97,752	$	47,376	$	11,001	$	8,492	$	7,143	$	171,764

Net Interest Income and Margins

The following table sets forth the average balance, interest income or interest expense, and average yield/rate paid for each category of interest-earning assets and interest-bearing liabilities, net interest spread, and net interest margin on average interest-earning assets for the ~~three~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016.~~2022. Federally tax-exempt income is presented on a taxable-equivalent basis assuming a ~~35%~~21% federal tax rate.

On a tax-equivalent basis, net interest income for the ~~third quarter of 2017~~six months ended June 30, 2023 was ~~$68.7~~$423.1 million, an increase of ~~$10.6~~$57.2 million, or ~~18.3%~~15.6%, compared with ~~$58.0~~$365.9 million reported in the same ~~quarter in 2016.~~period of 2022. The higher net interest income is a result of growth in average earning assets and increased market rates, partially offset by increased funding costs. Average interest earning assets ~~which~~ increased ~~$1.11~~$2.16 billion, or ~~19.2%~~10.3%, from ~~$5.78~~$21.04 billion in the ~~third quarter~~first six months of ~~2016~~2022 to ~~$6.89~~$23.21 billion for the ~~third quarter~~first six months of ~~2017.~~2023. This growth in interest earning assets resulted primarily from organic growth in average loans and investment securities purchases, partially offset by a decline in excess liquidity. The Company’s net interest margin ~~decreased~~ during the ~~third quarter~~first six months of ~~2017~~2023 was 3.68%, up 17 basis points from 3.51% reported for the first six months of 2022. Loan production in the lines of business (including retail mortgage, warehouse lending, SBA and premium finance) amounted to ~~3.95%~~$8.1 billion during the first six months of 2023, with weighted average yields of 6.72%, compared with ~~3.99% reported~~$10.0 billion and 3.98%, respectively, during the first six months of 2022. Loan production in the ~~third quarter~~banking division amounted to $1.1 billion during the first six months of ~~2016 but remained stable~~2023 with weighted average yields of 9.03%, compared with ~~3.95% reported in~~$1.9 billion and 5.21%, respectively, during the ~~second quarter~~first six months of ~~2017.~~2022.

Total interest income, on a tax-equivalent basis, increased to ~~$78.1~~$619.6 million during the ~~third quarter of 2017,~~six months ended June 30, 2023, compared with ~~$63.2~~$387.9 million in the same ~~quarter~~period of ~~2016.~~2022. Yields on earning assets increased to ~~4.50%~~5.38% during the ~~third quarter~~first six months of ~~2017,~~2023, compared with ~~4.35%~~3.72% reported in the third quarter of 2016. During the third quarter of 2017, loans comprised 85.9% of earning assets, compared with 83.6% in the same quarter of 2016. This increase is a result of growth in average legacy loans which increased $1.48 billion, or 51.1%, to $4.38 billion in the third quarter 2017 from $2.90 billion in the same period of ~~2016. Yields on legacy~~2022. During the first six months of 2023, loans ~~increased to 4.84% in the third quarter~~comprised 88.5% of ~~2017,~~average earning assets, compared with ~~4.62%~~82.5% in the same period of ~~2016. The yield~~2022. Yields on ~~purchased~~ loans ~~decreased from 6.40% in the third quarter of 2016~~increased to ~~5.94%~~5.55% during the ~~third quarter of 2017. Accretion income for the third quarter of 2017 was $2.7 million,~~six months ended June 30, 2023, compared with ~~$3.6 million in the third quarter of 2016. Excluding the effect of accretion on purchased loans, the yield on purchased loans was 5.21% for the third quarter of 2016, compared with 4.79%~~4.34% in the same period of 2017. Yields on purchased loan pools increased from 2.75% in the third quarter of 2016 to 2.91% in the same period in 2017. Management anticipates improving economic conditions and increased loan demand will provide consistent interest income.2022.

The yield on total interest-bearing liabilities increased from ~~0.50%~~0.37% during the six months ended June 30, 2022 to 2.68% in the ~~third quarter~~same period of ~~2016 to 0.76% in the third quarter of 2017.~~2023. Total funding costs, inclusive of ~~noninterest bearing~~noninterest-bearing demand deposits, increased to ~~0.57%~~1.82% in the ~~third quarter~~first six months of ~~2017,~~2023, compared with ~~0.36%~~0.22% during the ~~third quarter~~same period of ~~2016.~~2022. Deposit costs increased from ~~0.23%~~0.09% in the ~~third quarter~~first six months of ~~2016~~2022 to ~~0.35%~~1.46% in the ~~third quarter~~same period of ~~2017.~~2023. Non-deposit funding costs increased from ~~1.89%~~4.47% in the ~~third quarter~~first six months of ~~2016~~2022 to ~~2.18%~~5.17% in the ~~third quarter~~same period of ~~2017.~~2023. The increase in non-deposit funding costs was driven primarily by an ~~increased utilization of short-term FHLB advances coupled with an~~ increase in the average rate paid on other borrowings related to the March 2017 issuance of $75.0 million of 5.75% Fixed-To-Floating Rate Subordinated Notes due 2027. Ongoing efforts to maintain the percentage of funding from transaction deposits have succeeded such that non-CD deposits averaged 82.5% of total deposits in the third quarter of 2017, compared with 83.0% during the third quarter of 2016.index rates. Average balances of interest bearing deposits and their respective costs for the ~~third quarter of 2017~~six months ended June 30, 2023 and ~~2016~~2022 are shown below:


	Three Months Ended September 30, 2017			Three Months Ended September 30, 2016				Six Months Ended June 30, 2023			Six Months Ended June 30, 2022
(dollars in thousands)	Average Balance		Average Cost	Average Balance		Average Cost	(dollars in thousands)	Average Balance		Average Cost	Average Balance		Average Cost
NOW	$	1,201,151	0.20%	$	1,085,828	0.16%	NOW	$	4,047,484	1.65%	$	3,690,161	0.11%
MMDA	1,682,306		0.55%	1,435,151		0.34%	MMDA	4,998,417		2.54%	5,163,636		0.15%
Savings	278,991		0.07%	266,344		0.07%	Savings	1,007,693		0.72%	990,625		0.06%
Retail CDs < $100,000	437,641		0.62%	431,570		0.45%
Retail CDs > $100,000	582,598		1.01%	451,115		0.75%
Retail CDs							Retail CDs	1,819,307		2.48%	1,733,656		0.33%
Brokered CDs	—		—%	5,000		0.64%	Brokered CDs	762,672		5.09%	—		—%
Interest-bearing deposits	$	4,182,687	0.49%	$	3,675,008	0.33%	Interest-bearing deposits	$	12,635,573	2.25%	$	11,578,078	0.16%

Provision for ~~Loan~~Credit Losses

The Company’s provision for ~~loan~~credit losses during the ~~third quarter of 2017~~six months ended June 30, 2023 amounted to ~~$1.8~~$95.2 million, compared with ~~$2.2~~$21.2 million in the ~~second quarter~~six months ended June 30, 2022. This increase was primarily attributable to the updated economic forecast and organic growth in loans during the first six months of ~~2017~~2023. The provision for credit losses for the first six months of 2023 was comprised of $93.0 million related to loans, $2.2 million related to unfunded commitments and ~~$811,000 in the third quarter of 2016. At September 30, 2017, classified loans still accruing totaled $45.8 million,~~$7,000 related to other credit losses, compared with ~~$43.3~~$10.5 million ~~at December 31, 2016.~~related to loans, $10.8 million related to unfunded commitments and negative $126,000 related to other credit losses for the same period in 2022. Non-performing assets as a percentage of total assets decreased from ~~0.94%~~0.61% at December 31, ~~2016~~2022 to ~~0.75%~~0.57% at ~~September~~June 30, ~~2017.~~2023. The decrease in non-performing assets is primarily attributable to decreases in nonaccruing loans of $8.1 million and accruing loans delinquent 90 days or more of $4.4 million, partially offset by an increase in other real estate owned of $5.3 million. Net charge-offs on ~~legacy~~ loans during the ~~third quarter~~first six months of ~~2017~~2023 were ~~approximately $1.6~~$24.9 million, or ~~0.15%~~0.25% of average ~~legacy~~ loans on an annualized basis, compared with approximately ~~$371,000,~~$5.4 million, or ~~0.05%~~0.07%, in the ~~third quarter~~first six months of 2016. The Company’s allowance for loan losses allocated to legacy loans at September 30, 2017 was $21.2 million, or 0.46% of legacy loans, compared with $20.5 million, or 0.56% of legacy loans, at December 31, 2016.2022. The Company’s total allowance for ~~loan~~credit losses on loans at ~~September~~June 30, ~~2017~~2023 was ~~$26.0~~$272.1 million, or ~~0.44%~~1.33% of total loans, ~~increasing from $23.9~~compared with $205.7 million, or ~~0.45%~~1.04% of total loans, at December 31, ~~2016.~~2022. This increase is primarily attributable to organic growth in loans and the updated economic forecast.

Total ~~non-interest~~noninterest income for the ~~third quarter of 2017~~six months ended June 30, 2023 was ~~$27.0~~$123.4 million, a decrease of ~~$1.9~~$47.4 million, or ~~6.5%~~27.7%, from the ~~$28.9~~$170.8 million reported infor the ~~third quarter of 2016. Service charges on deposit accounts in the third quarter of 2017~~six months ended June 30, 2022.Income from mortgage banking activities decreased ~~$823,000,~~$49.6 million, or ~~7.2%~~40.7%, ~~to $10.5 million, compared with $11.4~~from $121.7 million in the ~~third quarter~~first six months of ~~2016. This decrease in service charge revenue was primarily attributable~~2022 to ~~lower overdraft fee income. Income from mortgage-related activities decreased $727,000, or 5.2%, from $14.1~~$72.1 million in the ~~third quarter~~same period of ~~2016 to $13.3 million in the third quarter of 2017.~~ 2023.Total production in the ~~third quarter~~first six months of ~~2017~~2023 amounted to ~~$401.7 million,~~$2.28 billion, compared with ~~$410.8 million~~$3.26 billion in the same ~~quarter~~period of ~~2016,~~2022, while spread (gain on sale) decreased to ~~3.30% in~~2.09% during the ~~current quarter~~six months ended June 30, 2023, compared with ~~3.69%~~2.63% in the same ~~quarter~~period of ~~2016.~~2022. The retail mortgage open pipeline ~~finished~~was $652.1 million at June 30, 2023, compared with $507.1 million at December 31, 2022 and $832.3 million at June 30, 2022. Mortgage banking activities was positively impacted during the ~~third quarter~~first six months of ~~2017 at $158.4~~2022 by a recovery of previous mortgage servicing right impairment of $20.5 million, compared with ~~$174.3~~no such recovery for the same period in 2023.

Other noninterest income increased $2.4 million, ator 9.7%, to $27.1 million for the ~~beginning~~first six months of 2023, compared with $24.7 million during the ~~third quarter~~same period of ~~2017~~2022. The increase in other noninterest income was primarily attributable to increases in fee income from equipment finance, BOLI income, gain on debt redemption and ~~$145.4~~derivative fee income of $1.6 million, $766,000, $1.0 million and $1.7 million, respectively, partially offset by a decrease of $2.6 million in trust income after exiting this business at the end of 2022.

Total noninterest expenses for the ~~third quarter~~six months ended June 30, 2023 increased $1.8 million, or 0.6%, to $287.8 million, compared with $286.0 million in the same period of ~~2016. Other service charges,~~2022. Salaries and employee benefits decreased $3.6 million, or 2.2%, from $165.8 million in the first six months of 2022 to $162.2 million in the same period of 2023, primarily due to reductions in mortgage commissions and ~~fees decreased $92,000,~~incentive compensation of $12.7 million and $5.5 million, partially offset by a reduction in deferred loan

origination costs of $11.3 million. Data processing and communications expenses increased $1.8 million, or ~~11.6%~~7.1%, to ~~$699,000~~$26.5 million in the first six months of 2023, from $24.7 million reported in the same period of 2022. Credit resolution-related expenses increased $1.8 million, or 373.6%, from negative $469,000 in the first six months of 2022 to $1.3 million in the same period of 2023. This increase in credit resolution-related expenses primarily resulted from a decrease in gain on sale of OREO properties of $2.0 million. Advertising and marketing expense was $6.2 million in the first six months of 2023, compared with $5.1 million in the first six months of 2022. Amortization of intangible assets decreased $931,000, or 9.0%, from $10.3 million in the first six months of 2022 to $9.4 million in the first six months of 2023. This decrease was primarily related to a reduction in core deposit intangible amortization. There were no merger and conversion charges in the first six months of 2023, compared with $977,000 in the same period in 2022. Loan servicing expenses decreased $1.7 million, or 9.2%, from $18.8 million in the first six months of 2022 to $17.1 million in the same period of 2023, primarily attributable to the sale of a portion of our mortgage servicing portfolio during the third quarter of ~~2017, compared with $791,000 during~~2022, partially offset by additional mortgage loans added from mortgage production over the third quarter of 2016. The decrease in other service charges, commissions and fees was primarily attributable to lower ATM fees, reflecting the Company's decision to waive ATM fees for customers during Hurricane Irma.previous year. Other non-interest income decreased $223,000, or 8.4%, to $2.4 million for the third quarter of 2017, compared with $2.6 million during the third quarter of 2016. The decrease in other non-interest income was primarily attributable to lower bank owned life insurance income and lower check order fee income.

~~Noninterest Expense~~

~~Total non-interest~~noninterest expenses ~~for the third quarter of 2017~~ increased ~~$10.6~~$4.4 million, or ~~19.9%~~12.6%, from $35.2 million in the first six months of 2022 to ~~$63.8 million, compared with $53.2~~$39.6 million in the same ~~quarter 2016. Salaries and employee benefits increased $4.6 million, or 16.4%, from $28.0~~period of 2023, due primarily to increases of $4.0 million in ~~the third quarter of 2016 to $32.6~~FDIC insurance expenses, $2.3 million in the third quarter of 2017 due to staff additions for the premium finance division, increased staffing related to the Company’s ongoing BSA compliance efforts, higher incentive accruals for production staff, increased commissions in the mortgagelegal and ~~SBA divisions,~~professional fees and ~~staff additions for the equipment finance line of business. Occupancy and~~

equipment expenses remained stable at $6.0 million for both the third quarter of 2017 and the third quarter of 2016. Tighter controls on expenses held increases in these costs to a minimum. Data processing and telecommunications expense increased $865,000, or 14.0%, to $7.1 million in the third quarter of 2017, compared with $6.2 million in the third quarter of 2016, due to an increase in the number of accounts being processed by our core banking system and additional software fees incurred related to the buildout of our BSA compliance program which we expect to stabilize. Credit resolution-related expenses decreased from $1.5 million in the third quarter of 2016 to $1.3 million in ~~the third quarter of 2017. Other~~other losses. These increases in other noninterest expenses ~~increased $5.2 million~~were partially offset by a decrease from ~~$9.3 million~~the first six months of 2022 in ~~the third quarter~~forgery losses of ~~2016~~$897,000 and variable expenses tied to ~~$14.5 million~~production in the third quarter of 2017 due primarily to consulting fees related to BSA compliance resolution, management and licensing fees associated with the premium finance division and loan servicing fees associated with consumer installment home improvement loans serviced by an unrelated third party.our mortgage division.

Income tax expense is influenced by the statutory rate, the amount of taxable income, the amount of tax-exempt income and the amount of ~~non-deductible~~nondeductible expenses. For the ~~third quarter of 2017,~~six months ended June 30, 2023, the Company reported income tax expense of ~~$8.1~~$38.5 million, compared with ~~$10.4~~$55.7 million in the same period of ~~2016. This decrease in income tax expense is directly correlated to the decrease in pre-tax income for the periods.~~2022. The Company’s effective tax rate for the ~~three months ending September 30, 2017 and 2016 was 28.8% and 32.5%, respectively.~~

~~Results of Operations for the Nine Months Ended September 30, 2017 and 2016~~

~~Consolidated Earnings and Profitability~~

~~Ameris reported net income available to common shareholders of $64.4 million, or $1.74 per diluted share, for the nine~~six months ended ~~September~~June 30, ~~2017, compared with $53.9 million, or $1.56 per diluted share, for~~2023 and 2022 was 23.8% and 24.5%, respectively. The decrease in the ~~same period in 2016. The Company’s return on average assets~~effective tax rate is primarily a result of a discrete charge to the Company's state tax liability and average shareholders’ equity were 1.20% and 11.39%, respectively, for the nine months ended September 30, 2017, compared with 1.19% and 12.01%, respectively, for the nine months ended September 30, 2016. During the nine months ended September 30, 2017, the Company incurred pre-taxnondeductible merger and conversion charges of $494,000, pre-tax BSA compliance resolution expenses of $4.7 million, pre-tax Hurricane Irma expenses of $410,000, and pre-tax losses on the sale of premises of $956,000. During the nine months ended September 30, 2016, the Company incurred pre-tax merger and conversion charges of $6.4 million and pre-tax losses on the sale of premises of $562,000. Excluding these merger and conversion charges, compliance resolution expenses, Hurricane Irma expenses, and losses on the sale of premises, the Company’s net income would have been $68.7 million, or $1.86 per diluted share, and $58.4 million, or $1.69 per diluted share, for the first nine months of 2017 and 2016, respectively.

~~Below is a reconciliation of adjusted operating net income to net income, as discussed above.~~

~~Below is additional information regarding the retail banking activities, mortgage banking activities, warehouse lending activities, SBA activities and premium finance activities of the Company~~ during the first ~~nine~~six months of ~~2017 and 2016, respectively:~~2022.

Interest income, on a tax-equivalent basis, for the nine months ended September 30, 2017 was $219.7 million, an increase of $41.0 million, or 22.9%, as compared with $178.7 million for the same period in 2016. Average earning assets for the nine-month period increased $1.12 billion, or 20.4%, to $6.61 billion as of September 30, 2017, compared with $5.49 billion as of September 30, 2016. The increase in average earning assets is due to organic growth in the loan portfolio coupled with acquisition activity during the first quarter of 2016. Yield on average earning assets increased to 4.44% for the nine months ended September 30, 2017, compared with 4.35% in the first nine months of 2016. The increase in the yield on average earning assets was primarily attributable to the growth in legacy loans.

~~Interest Expense~~

Total interest expense for the nine months ended September 30, 2017 amounted to $24.2 million, reflecting a $10.2 million increase from the $14.0 million expense recorded in the same period of 2016. During the nine-month period ended September 30, 2017, the Company’s funding costs increased to 0.51% from 0.35% reported in 2016. Deposit costs increased to 0.32% during the nine-month period ended September 30, 2017, compared with 0.23% during the same period in 2016. Total non-deposit funding costs decreased to 1.99% during the nine-month period ended September 30, 2017, compared with 2.36% during the first nine months of 2016. The decrease in non-deposit funding costs was driven primarily by an increased utilization of lower rate short-term FHLB advances.

~~Net Interest Income~~

The following table sets forth the average balance, interest income or interest expense, and average yield/rate paid for each category of interest-earning assets and interest-bearing liabilities, net interest spread, and net interest margin on average interest-earning assets for the nine months ended September 30, 2017 and 2016. Federally tax-exempt income is presented on a taxable-equivalent basis assuming a 35% federal tax rate.

Nine Months Ended
September 30,
2017 2016
(dollars in thousands)
Average
Balance

Interest
Income/
Expense

Average
Yield/
Rate Paid

Average
Balance

Interest
Income/
Expense

Average
Yield/
Rate Paid
Assets

Interest-earning assets:

Federal funds sold and interest-bearing deposits in banks $ 126,014
$ 1,070
1.14% $ 134,060
$ 659
0.66%
Investment securities 864,684
16,917
2.62% 840,688
15,227
2.42%
Loans held for sale 105,296
2,842
3.61% 96,340
2,402
3.33%
Loans 4,018,597
143,806
4.78% 2,642,498
93,887
4.75%
Purchased loans 982,033
43,986
5.99% 1,147,821
53,348
6.21%
Purchased loan pools 513,750
11,109
2.89% 629,118
13,220
2.81%
Total interest-earning assets 6,610,374
219,730
4.44% 5,490,525
178,743
4.35%
Noninterest-earning assets 569,956

539,656

Total assets $ 7,180,330

$ 6,030,181

Liabilities and Shareholders’ Equity

Interest-bearing liabilities:

Savings and interest-bearing demand deposits $ 3,048,284
$ 7,614
0.33% $ 2,740,368
$ 4,922
0.24%
Time deposits 994,770
5,865
0.79% 872,209
3,808
0.58%
Federal funds purchased and securities sold under agreements to repurchase 29,612
44
0.20% 44,433
77
0.23%
FHLB advances 539,496
3,994
0.99% 126,855
571
0.60%
Other borrowings 66,420
2,900
5.84% 47,809
1,333
3.72%
Subordinated deferrable interest debentures 84,712
3,764
5.94% 79,912
3,306
5.53%
Total interest-bearing liabilities 4,763,294
24,181
0.68% 3,911,586
14,017
0.48%
Demand deposits 1,624,837

1,490,152

Other liabilities 36,046

28,626

Shareholders’ equity 756,153

599,817

Total liabilities and shareholders’ equity $ 7,180,330

$ 6,030,181

Interest rate spread

3.76%

3.87%
Net interest income
$ 195,549

$ 164,726

Net interest margin

3.96%

4.01%

For the year-to-date period ending September 30, 2017, the Company reported $195.5 million of net interest income on a tax-equivalent basis, an increase of $30.8 million, or 18.7%, compared with $164.7 million of net interest income for the same period in 2016. The average balance of earning assets increased $1.12 billion, or 20.4%, from $5.49 billion during the first nine months of 2016 to $6.61 billion during the first nine months of 2017. The increase in average earning assets is due to organic growth in the loan portfolio coupled with acquisition activity during the first quarter of 2016. The Company’s net interest margin decreased to 3.96% in the nine-month period ending September 30, 2017, compared with 4.01% in the same period in 2016. The decrease in the net interest margin was primarily attributable to the increase in yield on interest-bearing liabilities.



		Page

PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements.

	Consolidated Balance Sheets as of ~~September~~June 30 ~~2017~~, 2023 (unaudited) and December 31, ~~2016~~2022	1

	Consolidated Statements of Income and Comprehensive Income for the Three and ~~Nine-Month Periods~~Six Months Ended ~~September~~June 30 ~~2017~~, 2023 and ~~2016~~2022 (unaudited)	2

	Consolidated Statements of Shareholders’ Equity for the ~~Nine~~ Three and Six Months Ended ~~September~~June 30 ~~2017~~, 2023 and ~~2016~~2022 (unaudited)	3

	Consolidated Statements of Cash Flows for the ~~Nine~~ Six Months Ended ~~September~~June 30 ~~2017~~, 2023 and ~~2016~~2022 (unaudited)	45

	Notes to Consolidated Financial Statements	67

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	4134

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	6454

Item 4.	Controls and Procedures.	6555

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings.	6556

Item 1A.	Risk Factors.	6556

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	6556

Item 3.	Defaults Upon Senior Securities.	6556

Item 4.	Mine Safety Disclosures.	6556

Item 5.	Other Information.	6556

Item 6.	Exhibits.	6657

Signatures		6758



	Nine Months Ended September 30, 2017					Nine Months Ended September 30, 2016
	Shares		Amount			Shares		Amount
Common Stock
Balance at beginning of period	36,377,807		$	36,378		33,625,162		$	33,625
Issuance of common stock	2,141,072		2,141			2,549,469		2,549
Issuance of restricted shares	84,147		84			125,581		126
Cancellation of restricted shares	(472	)	—			(7,085	)	(7		)
Proceeds from exercise of stock options	103,356		103			54,510		55
Issued at end of period	38,705,910		$	38,706		36,347,637		$	36,348

Capital Surplus
Balance at beginning of period			$	410,276				$	337,349
Share-based compensation			2,419					1,586
Issuance of common shares, net of issuance costs of $4,925 and $0			92,359					69,906
Issuance of restricted shares			(84		)			(126		)
Cancellation of restricted shares			—					7
Proceeds from exercise of stock options			1,809					908
Balance at end of period			$	506,779				$	409,630

Retained Earnings
Balance at beginning of period			$	214,454				$	152,820
Net income			64,398					53,923
Dividends on common shares			(11,158		)			(6,974		)
Balance at end of period			$	267,694				$	199,769

Accumulated Other Comprehensive Income, Net of Tax
Unrealized gains (losses) on securities and derivatives:
Balance at beginning of period			$	(1,058	)			$	3,353
Other comprehensive income during the period			4,299					7,096
Balance at end of period			$	3,241				$	10,449

Treasury Stock
Balance at beginning of period	1,456,333		$	(13,613	)	1,413,777		$	(12,388	)
Purchase of treasury shares	18,528		(886		)	42,556		(1,225		)
Balance at end of period	1,474,861		$	(14,499	)	1,456,333		$	(13,613	)

Total Shareholders’ Equity			$	801,921				$	642,583



(dollars in thousands, except per share amount)
Ameris common shares issued	128,572
Price per share of the Company's common stock	$	45.45
Fair value of consideration transferred	$	5,844



(dollars in thousands)	September 30, 2017			September 30, 2016
Gross gains on sales of securities	$	38		$	312
Gross losses on sales of securities	(1		)	(218		)
Net realized gains on sales of securities available for sale	$	37		$	94

Sales proceeds	$	3,090		$	53,026



	As of and for the Period Ended
(dollars in thousands)	September 30, 2017		December 31, 2016		September 30, 2016
Nonaccrual loans	$	15,325	$	18,114	$	16,570
Troubled debt restructurings not included above	12,452		14,209		14,013
Total impaired loans	$	27,777	$	32,323	$	30,583

Quarter-to-date interest income recognized on impaired loans	$	297	$	225	$	252
Year-to-date interest income recognized on impaired loans	$	857	$	1,033	$	808
Quarter-to-date foregone interest income on impaired loans	$	233	$	267	$	239
Year-to-date foregone interest income on impaired loans	$	753	$	977	$	710



(dollars in thousands)	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Three Month Average Recorded Investment		Nine Month Average Recorded Investment
September 30, 2017
Commercial, financial and agricultural	$	2,924	$	1,121	$	1,331	$	2,452	$	379	$	2,478	$	2,380
Real estate – construction and development	1,655		532		627		1,159		81		1,179		1,160
Real estate – commercial and farmland	11,451		536		9,938		10,474		806		10,669		11,416
Real estate – residential	15,211		4,558		8,636		13,194		1,058		13,683		14,814
Consumer installment loans	538		498		—		498		—		507		554
Total	$	31,779	$	7,245	$	20,532	$	27,777	$	2,324	$	28,516	$	30,324



Risk Grade	Commercial, Financial and Agricultural		Real Estate - Construction and Development		Real Estate - Commercial and Farmland		Real Estate - Residential		Consumer Installment Loans		Other		Total
September 30, 2017
10	$	495,116	$	—	$	6,029	$	49	$	9,068	$	—	$	510,262
15	559,781		959		75,462		55,759		256		—		692,217
20	117,904		48,640		1,005,945		800,557		24,332		5,795		2,003,173
23	343		4,403		4,242		5,986		3		—		14,977
25	121,558		488,956		431,862		86,702		148,891		—		1,277,969
30	8,350		4,458		17,568		5,674		93		—		36,143
40	4,150		2,773		17,774		14,562		671		—		39,930
50	7		—		—		—		—		—		7
60	—		—		—		—		—		—		—
Total	$	1,307,209	$	550,189	$	1,558,882	$	969,289	$	183,314	$	5,795	$	4,574,678

December 31, 2016
10	$	397,093	$	—	$	8,814	$	125	$	8,532	$	—	$	414,564
15	376,323		5,390		102,893		54,136		405		—		539,147
20	97,057		36,307		889,539		609,583		25,026		12,486		1,669,998
23	366		6,803		8,533		7,470		14		—		23,186
25	92,066		307,903		357,151		88,370		62,098		—		907,588
30	144		719		22,986		5,197		126		—		29,172
40	4,089		5,923		16,303		16,038		714		—		43,067
50	—		—		—		99		—		—		99
60	—		—		—		—		—		—		—
Total	$	967,138	$	363,045	$	1,406,219	$	781,018	$	96,915	$	12,486	$	3,626,821



	September 30, 2017			September 30, 2016
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	1	$	4	5	$	59
Real estate – construction and development	—	—		2	251
Real estate – commercial and farmland	2	226		4	1,658
Real estate – residential	10	526		7	887
Consumer installment	6	27		9	44
Total	19	$	783	27	$	2,899



September 30, 2017	Accruing Loans			Non-Accruing Loans
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	4	$	44	13	$	129
Real estate – construction and development	7	424		2	34
Real estate – commercial and farmland	16	4,769		5	210
Real estate – residential	78	7,209		16	1,212
Consumer installment	4	6		36	130
Total	109	$	12,452	72	$	1,715



(dollars in thousands)	Commercial, Financial and Agricultural			Real Estate – Construction and Development			Real Estate – Commercial and Farmland			Real Estate – Residential			Consumer Installment Loans and Other			Purchased Loans			Purchased Loan Pools			Total
Three Months Ended September 30, 2017
Balance, June 30, 2017	$	3,302		$	3,756		$	7,869		$	5,605		$	1,155		$	1,791		$	1,623		$	25,101
Provision for loan losses	910			(587		)	68			127			670			745			(146		)	1,787
Loans charged off	(1,091		)	(1		)	(18		)	(852		)	(320		)	(161		)	—			(2,443		)
Recoveries of loans previously charged off	409			126			26			56			17			887			—			1,521
Balance, September 30, 2017	$	3,530		$	3,294		$	7,945		$	4,936		$	1,522		$	3,262		$	1,477		$	25,966

Nine Months Ended September 30, 2017:
Balance, December 31, 2016	$	2,192		$	2,990		$	7,662		$	6,786		$	827		$	1,626		$	1,837		$	23,920
Provision for loan losses	2,535			155			540			(9		)	1,539			1,428			(360		)	5,828
Loans charged off	(1,896		)	(95		)	(413		)	(2,031		)	(922		)	(1,472		)	—			(6,829		)
Recoveries of loans previously charged off	699			244			156			190			78			1,680			—			3,047
Balance, September 30, 2017	$	3,530		$	3,294		$	7,945		$	4,936		$	1,522		$	3,262		$	1,477		$	25,966

Period-end allocation:
Loans individually evaluated for impairment ⁽¹⁾	$	509		$	81		$	1,380		$	1,058		$	—		$	3,262		$	105		$	6,395
Loans collectively evaluated for impairment	3,021			3,213			6,565			3,878			1,522			—			1,372			19,571
Ending balance	$	3,530		$	3,294		$	7,945		$	4,936		$	1,522		$	3,262		$	1,477		$	25,966

Loans:
Individually evaluated for impairment⁽¹⁾	$	3,204		$	627		$	10,512		$	8,636		$	—		$	32,032		$	915		$	55,926
Collectively evaluated for impairment	1,304,005			549,562			1,548,370			960,653			189,109			763,271			464,303			5,779,273
Acquired with deteriorated credit quality	—			—			—			—			—			121,823			—			121,823
Ending balance	$	1,307,209		$	550,189		$	1,558,882		$	969,289		$	189,109		$	917,126		$	465,218		$	5,957,022



(dollars in thousands)	Covered Loans		Less: Fair Value Adjustments		Total Covered Loans		OREO		Less: Fair Value Adjustments		Total Covered OREO		Total Covered Assets		FDIC Loss- Share Receivable (Payable)
September 30, 2017
AUB	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
USB	2,763		12		2,751		—		—		—		2,751		(1,752		)
SCB	2,541		27		2,514		—		—		—		2,514		(169		)
FBJ	3,647		394		3,253		—		—		—		3,253		(312		)
DBT	9,663		356		9,307		81		—		81		9,388		(4,442		)
TBC	1,667		—		1,667		—		—		—		1,667		(8		)
HTB	1,856		28		1,828		—		—		—		1,828		27
OGB	930		31		899		—		—		—		899		(1,032		)
CBG	10,329		678		9,651		161		—		161		9,812		(502		)
Total	$	33,396	$	1,526	$	31,870	$	242	$	—	$	242	$	32,112	$	(8,190	)

December 31, 2016
AUB	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	(27	)
USB	3,199		13		3,186		51		—		51		3,237		(1,642		)
SCB	4,019		51		3,968		—		—		—		3,968		(32		)
FBJ	3,767		452		3,315		—		—		—		3,315		(234		)
DBT	12,166		565		11,601		—		—		—		11,601		(4,591		)
TBC	1,679		—		1,679		—		—		—		1,679		(33		)
HTB	1,913		33		1,880		—		—		—		1,880		734
OGB	1,077		32		1,045		—		—		—		1,045		(993		)
CBG	33,449		1,963		31,486		1,161		4		1,157		32,643		505
Total	$	61,269	$	3,109	$	58,160	$	1,212	$	4	$	1,208	$	59,368	$	(6,313	)



FORM			ý10-Q



(dollars in thousands)	Unrealized Gain (Loss) on Derivatives			Unrealized Gain (Loss) on Securities			Accumulated Other Comprehensive Income (Loss)
Balance, January 1, 2017	$	176		$	(1,234	)	$	(1,058	)
Reclassification for gains included in net income, net of tax	—			(24		)	(24		)
Current year changes, net of tax	(38		)	4,361			4,323
Balance, September 30, 2017	$	138		$	3,103		$	3,241



											Nine Months Ended
(in thousands, except share and per share data)	Third Quarter 2017		Second Quarter 2017		First Quarter 2017		Fourth Quarter 2016		Third Quarter 2016		September 30, 2017		September 30, 2016
Results of Operations:
Net interest income	$	66,855	$	63,157	$	60,590	$	57,279	$	57,067	$	190,602	$	162,092
Net interest income (tax equivalent)	68,668		64,773		62,108		58,897		58,024		195,549		164,726
Provision for loan losses	1,787		2,205		1,836		1,710		811		5,828		2,381
Non-interest income	26,999		28,189		25,706		24,272		28,864		80,894		81,529
Non-interest expense	63,767		55,739		53,093		54,677		53,199		172,599		161,158
Income tax expense	8,142		10,315		10,214		6,987		10,364		28,671		26,159
Net income available to common shareholders	20,158		23,087		21,153		18,177		21,557		64,398		53,923
Selected Average Balances:
Investment securities	$	864,456	$	866,960	$	862,616	$	856,671	$	857,433	$	864,684	$	840,688
Loans held for sale	126,798		110,933		77,617		102,926		105,859		105,296		96,340
Loans	4,379,082		3,994,213		3,678,149		3,145,714		2,897,771		4,018,597		2,642,498
Purchased loans	937,595		973,521		1,034,983		1,101,907		1,199,175		982,033		1,147,821
Purchased loan pools	475,742		516,949		547,057		590,617		629,666		513,750		629,118
Earning assets	6,892,939		6,584,386		6,347,807		5,925,634		5,780,455		6,610,374		5,490,525
Assets	7,461,367		7,152,024		6,915,965		6,573,344		6,330,350		7,180,330		6,030,181
Deposits	5,837,154		5,671,394		5,491,324		5,490,657		5,221,219		5,667,891		5,102,729
Shareholders’ equity	796,856		774,664		695,830		653,991		640,382		756,153		599,817
Period-End Balances:
Investment securities	$	867,570	$	861,188	$	866,715	$	852,199	$	862,702	$	867,570	$	862,702
Loans held for sale	137,392		146,766		105,637		105,924		126,263		137,392		126,263
Loans	4,574,678		4,230,228		3,785,480		3,626,821		3,091,039		4,574,678		3,091,039
Purchased loans	917,126		950,499		1,006,935		1,069,191		1,129,381		917,126		1,129,381
Purchased loan pools	465,218		490,114		529,099		568,314		624,886		465,218		624,886
Earning assets	7,074,828		6,816,606		6,525,911		6,293,670		5,925,072		7,074,828		5,925,072
Total assets	7,649,820		7,397,858		7,094,856		6,892,031		6,493,495		7,649,820		6,493,495
Deposits	5,895,504		5,793,397		5,642,369		5,575,163		5,306,098		5,895,504		5,306,098
Shareholders’ equity	801,921		782,682		758,216		646,437		642,583		801,921		642,583
Per Common Share Data:
Earnings per share - basic	$	0.54	0.62		0.59		0.52		0.62		1.76		1.58
Earnings per share - diluted	$	0.54	0.62		0.59		0.52		0.61		1.74		1.56
Book value per common share	$	21.54	$	21.03	$	20.42	$	18.51	$	18.42	$	21.54	$	18.42
Tangible book value per common share	$	17.78	$	17.24	$	16.60	$	14.42	$	14.38	$	17.78	$	14.38
End of period shares outstanding	37,231,049		37,222,904		37,128,714		34,921,474		34,891,304		37,231,049		34,891,304



	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands, except share and per share data)	2017			2016			2017			2016
Net income available to common shareholders	$	20,158		$	21,557		$	64,398		$	53,923
Adjustment items:
Merger and conversion charges	92			—			494			6,359
Certain compliance resolution expenses	4,729			—			4,729			—
Financial impact of Hurricane Irma	410			—			410			—
Losses on the sale of premises	91			238			956			562
Tax effect of management adjusted charges	(1,863		)	(83		)	(2,306		)	(2,422		)
After tax management-adjusted charges	3,459			155			4,283			4,499
Adjusted operating net income	$	23,617		$	21,712		$	68,681		$	58,422

Weighted average common shares outstanding - diluted	37,552,667			35,194,739			37,017,486			34,470,101
Earnings per diluted share	$	0.54		$	0.61		$	1.74		$	1.56
Adjusted operating net income per diluted share	$	0.63		$	0.62		$	1.86		$	1.69


	Quarter Ended September 30,											Six Months Ended June 30,
	2017					2016						2023					2022
(dollars in thousands)	Average Balance		Interest Income/ Expense		Average Yield/ Rate Paid	Average Balance		Interest Income/ Expense		Average Yield/ Rate Paid	(dollars in thousands)	Average Balance		Interest Income/ Expense		Average Yield/ Rate Paid	Average Balance		Interest Income/ Expense		Average Yield/ Rate Paid
Assets											Assets
Interest-earning assets:											Interest-earning assets:
Federal funds sold and interest-bearing deposits in banks	$	109,266	$	406	1.47%	$	90,551	$	155	0.68%
Federal funds sold, interest-bearing deposits in banks, and time deposits in other banks											Federal funds sold, interest-bearing deposits in banks, and time deposits in other banks	$	929,496	$	22,799	4.95%	$	2,817,071	$	5,878	0.42%
Investment securities	864,456		5,665		2.60%	857,433		4,872		2.26%	Investment securities	1,751,036		31,074		3.58%	862,178		11,879		2.78%
Loans held for sale	126,798		1,131		3.54%	105,859		826		3.10%	Loans held for sale	534,192		15,405		5.82%	1,020,611		18,168		3.59%
Loans	4,379,082		53,394		4.84%	2,897,771		33,672		4.62%	Loans	19,993,794		550,273		5.55%	16,344,409		352,000		4.34%
Purchased loans	937,595		14,048		5.94%	1,199,175		19,296		6.40%
Purchased loan pools	475,742		3,491		2.91%	629,666		4,346		2.75%
Total interest-earning assets	6,892,939		78,135		4.50%	5,780,455		63,167		4.35%	Total interest-earning assets	23,208,518		619,551		5.38%	21,044,269		387,925		3.72%
Noninterest-earning assets	568,428					549,895					Noninterest-earning assets	2,166,794					2,296,516
Total assets	$	7,461,367				$	6,330,350				Total assets	$	25,375,312				$	23,340,785

Liabilities and Shareholders’ Equity											Liabilities and Shareholders’ Equity
Interest-bearing liabilities:											Interest-bearing liabilities:
Savings and interest-bearing demand deposits	$	3,162,448	$	2,963	0.37%	$	2,787,323	$	1,719	0.25%	Savings and interest-bearing demand deposits	$	10,053,594	$	99,653	2.00%	$	9,844,422	$	6,190	0.13%
Time deposits	1,020,239		2,173		0.85%	887,685		1,355		0.61%	Time deposits	2,581,979		41,616		3.25%	1,733,656		2,810		0.33%
Federal funds purchased and securities sold under agreements to repurchase	19,414		11		0.22%	37,305		18		0.19%	Federal funds purchased and securities sold under agreements to repurchase	—		—		—%	2,931		4		0.28%
FHLB advances	608,413		1,849		1.21%	265,202		393		0.59%	FHLB advances	1,687,286		39,670		4.74%	48,766		382		1.58%
Other borrowings	75,590		1,183		6.21%	49,345		479		3.86%	Other borrowings	338,912		9,251		5.50%	410,058		9,601		4.72%
Subordinated deferrable interest debentures	85,040		1,288		6.01%	83,719		1,179		5.60%	Subordinated deferrable interest debentures	128,808		6,286		9.84%	126,814		3,047		4.85%
Total interest-bearing liabilities	4,971,144		9,467		0.76%	4,110,579		5,143		0.50%	Total interest-bearing liabilities	14,790,579		196,476		2.68%	12,166,647		22,034		0.37%
Demand deposits	1,654,467					1,546,211					Demand deposits	6,931,852					7,807,929
Other liabilities	38,900					33,178					Other liabilities	381,094					347,109
Shareholders’ equity	796,856					640,382					Shareholders’ equity	3,271,787					3,019,100
Total liabilities and shareholders’ equity	$	7,461,367				$	6,330,350				Total liabilities and shareholders’ equity	$	25,375,312				$	23,340,785
Interest rate spread					3.74%					3.85%	Interest rate spread					2.70%					3.35%
Net interest income			$	68,668				$	58,024		Net interest income			$	423,075				$	365,891
Net interest margin					3.95%					3.99%	Net interest margin					3.68%					3.51%


	U.S. Treasuries				U.S. Government-Sponsored Agencies				State, County and Municipal Securities
(dollars in thousands) Securities available-for-sale (1)	Amount		Yield (2)		Amount		Yield (2)		Amount		Yield (2)(3)
One year or less	$	92,834	3.67	%	$	—	—	%	$	1,889	4.21	%
After one year through five years	665,832		3.16		972		2.16		17,653		3.87
After five years through ten years	—		—		—		—		6,554		4.44
After ten years	—		—		—		—		6,132		3.63
	$	758,666	3.22	%	$	972	2.16	%	$	32,228	3.96	%

	Corporate Debt Securities				SBA Pool Securities				Mortgage-Backed Securities
(dollars in thousands) Securities available-for-sale (1)	Amount		Yield (2)		Amount		Yield (2)		Amount		Yield (2)
One year or less	$	—	—	%	$	—	—	%	$	19,709	2.37	%
After one year through five years	13,703		6.88		5,876		2.08		259,447		3.24
After five years through ten years	—		—		5,575		2.57		119,940		2.89
After ten years	1,352		8.00		12,375		3.19		230,513		3.25
	$	15,055	7.02	%	$	23,826	2.77	%	$	629,609	3.15	%

	State, County and Municipal Securities				Mortgage-Backed Securities
(dollars in thousands) Securities held-to-maturity (1)	Amount		Yield (2)(3)		Amount		Yield (2)
One year or less	$	—	—	%	$	—	—	%
After one year through five years	—		—		11,997		1.34
After five years through ten years	—		—		46,034		2.96
After ten years	31,905		3.93		52,577		2.26
	$	31,905	3.93	%	$	110,608	2.45	%



(dollars in thousands)	Amortized Cost		Fair Value		Book Yield	Modified Duration	Estimated Cash Flows 12 Months
September 30, 2017
U.S. government sponsored agencies	$	1,000	$	1,004	3.20%	0.19	$	1,000
State, county and municipal securities	140,190		143,387		4.06%	4.82	14,048
Corporate debt securities	46,704		47,249		4.00%	5.34	3,000
Mortgage-backed securities	626,927		627,953		2.34%	3.91	102,846
Total debt securities	$	814,821	$	819,593	2.73%	4.14	$	120,894

December 31, 2016
U.S. government sponsored agencies	$	999	$	1,020	3.20%	0.92	$	1,000
State, county and municipal securities	149,899		152,035		3.73%	5.34	7,884
Corporate debt securities	32,375		32,172		2.94%	4.87	2,000
Mortgage-backed securities	641,362		637,508		2.38%	4.33	94,081
Total debt securities	$	824,635	$	822,735	2.65%	4.53	$	104,965



	As of and for the Nine Months Ended September 30, 2017
(dollars in thousands)	Legacy Loans			Purchased Loans			Purchased Loan Pools			Total
Allowance for loan losses at end of period	$	21,227		$	3,262		$	1,477		$	25,966
Net charge-offs (recoveries) for the period	3,990			(208		)	—			3,782
Loan balances:
End of period	4,574,678			917,126			465,218			5,957,022
Average for the period	4,018,597			982,033			513,750			5,514,380
Net charge-offs as a percentage of average loans	0.13		%	(0.03		)%	0.00		%	0.09		%
Allowance for loan losses as a percentage of end of period loans	0.46		%	0.36		%	0.32		%	0.44		%


	As of and for the Six Months Ended
(dollars in thousands)	June 30, 2023			June 30, 2022
Allowance for credit losses on loans at end of period	$	272,071		$	172,642
Net charge-offs for the period	24,914			5,433
Loan balances:
End of period	20,471,759			17,561,022
Average for the period	19,993,794			16,344,409
Net charge-offs as a percentage of average loans (annualized)	0.25		%	0.07		%
Allowance for credit losses on loans as a percentage of end of period loans	1.33		%	0.98		%



September 30, 2017	Loans Currently Paying Under Restructured Terms			Loans that have Defaulted Under Restructured Terms
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	8	$	56	9	$	117
Real estate – construction and development	6	399		3	59
Real estate – commercial and farmland	17	4,778		4	201
Real estate – residential	80	7,425		14	996
Consumer installment	25	74		15	62
Total	136	$	12,732	45	$	1,435


~~(1)~~	~~total loans for construction, land development, and other land, net of owner occupied loans, represent 100% or more of a bank’s total risk-based capital; or~~


~~(2)~~	total loans secured by multifamily and nonfarm nonresidential properties and loans for construction, land development, and other land, net of owner occupied loans, represent 300% or more of a bank’s total risk-based capital.


~~(1)~~	within CRE loans, construction and development loans are somewhat dependent upon continued strength in demand for residential real estate, which is reliant on favorable real estate mortgage rates and changing population demographics;


~~(2)~~	~~on average, CRE loan sizes are generally larger than non-CRE loan types; and~~


~~(3)~~	~~certain construction and development loans may be less predictable and more difficult to evaluate and monitor.~~


	Internal Limit	Actual
		June 30, 2023	December 31, 2022
Construction and development loans	100%	80%	79%
Total CRE loans (excluding owner-occupied)	300%	283%	292%


							June 30, 2023	March 31, 2023	December 31, 2022	September 30, 2022	June 30, 2022
	September 30, 2017	June 30, 2017	March 31, 2017	December 31, 2016	September 30, 2016
Investment securities available for sale to total deposits	13.90%	14.13%	14.72%	14.76%	15.80%
Investment securities available-for-sale to total deposits						Investment securities available-for-sale to total deposits	7.14%	7.52%	7.71%	6.45%	5.35%
Loans (net of unearned income) to total deposits	101.04%	97.88%	94.31%	94.42%	91.32%	Loans (net of unearned income) to total deposits	100.14%	100.50%	102.02%	96.61%	89.21%
Interest-earning assets to total assets	92.48%	92.14%	91.98%	91.32%	91.25%	Interest-earning assets to total assets	91.51%	91.71%	91.11%	90.76%	89.88%
Interest-bearing deposits to total deposits	70.86%	71.12%	70.67%	71.78%	70.54%	Interest-bearing deposits to total deposits	67.19%	61.60%	59.26%	57.14%	58.02%


Earnings Simulation Model Results
Change in	% Change in Projected Baseline
Interest Rates	Net Interest Income
(in bps)	12 Months	24 Months
400	(3.9)%	6.3%
300	(0.7)%	6.2%
200	1.2%	5.0%
100	0.9%	2.7%
(100)	(1.1)%	(2.9)%
(200)	(2.3)%	(6.3)%
(300)	(3.5)%	(9.8)%
(400)	(4.3)%	(12.9)%


Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs(1
April 1, 2023 through April 30, 2023	—	$	—	—	$	94,479,288
May 1, 2023 through May 31, 2023	264,500	$	30.18	264,500	$	86,496,795
June 1, 2023 through June 30, 2023	—	$	—	—	$	86,496,795
Total	264,500	$	30.18	264,500	$	86,496,795



Exhibit Number		Description

~~3.1~~	Articles of Incorporation of Ameris Bancorp, as amended (incorporated by reference to Exhibit 2.1 to Ameris Bancorp’s Regulation A Offering Statement on Form 1-A filed with the SEC on August 14, 1987).

~~3.2~~3.1		Articles of Amendment to the Articles of Incorporation of Ameris Bancorp (incorporated by reference to Exhibit 3.7 to Ameris Bancorp’s Annual Report on Form 10-K filed with the SEC on March 26, 1999).

~~3.3~~	Articles of Amendment to the Articles of Incorporation of Ameris Bancorp (incorporated by reference to Exhibit 3.9 to Ameris Bancorp’s Annual Report on Form 10-K filed with the SEC on March 31, 2003).

~~3.4~~	~~Articles of Amendment to the~~Restated Articles of Incorporation of Ameris Bancorp (incorporated by reference to Exhibit 3.1 to Ameris Bancorp’s ~~Current~~Annual Report on Form ~~8-K~~10-K filed with the SEC on ~~December 1, 2005)~~February 28, 2023).

~~3.5~~3.2		Articles of Amendment to the Articles of Incorporation of Ameris Bancorp (incorporated by reference to Exhibit 3.1 to Ameris Bancorp’s Current Report on Form 8-K filed with the SEC on November 21, 2008).

~~3.6~~	Articles of Amendment to the Articles of Incorporation of Ameris Bancorp (incorporated by reference to Exhibit 3.1 to Ameris Bancorp’s Current Report on Form 8-K filed with the SEC on June 1, 2011).

~~3.7~~	Bylaws of Ameris Bancorp, as amended and restated ~~effective July 18, 2017~~through February 23, 2023 (incorporated by reference to Exhibit ~~3.1~~3.2 to Ameris ~~Bancorp’s Current~~Bancorp's Quarterly Report on Form ~~8-K~~10-Q filed with the SEC on ~~July 21, 2017)~~May 8, 2023).

10.1*		~~Severance Protection and Restrictive Covenants Agreement by and among Ameris Bancorp, Ameris Bank and William D. McKendry dated as~~Summary of ~~October 3, 2017 (incorporated by reference to Exhibit 10.1 to Ameris Bancorp's Current Report on Form 8-K filed with the SEC on October 6, 2017).~~Director Compensation.

~~10.2~~31.1		Third Amendment to Loan Agreement dated October 20, 2017 by and between Ameris Bancorp and NexBank SSB (incorporated by reference to Exhibit 10.1 to Ameris Bancorp's Current Report on Form 8-K filed with the SEC on October 23, 2017).

~~10.3~~	Third Amended and Restated Revolving Promissory Note dated as of September 26, 2017 issued by Ameris Bancorp to NexBank SSB (incorporated by reference to Exhibit 10.2 to Ameris Bancorp's Current Report on Form 8-K filed with the SEC on October 23, 2017). .

~~31.1~~	Rule 13a-14(a)/15d-14(a) Certification by the Company’s Chief Executive Officer.

31.2		Rule 13a-14(a)/15d-14(a) Certification by the Company’s Chief Financial Officer.

32.1		Section 1350 Certification by the Company’s Chief Executive Officer.

32.2		Section 1350 Certification by the Company’s Chief Financial Officer.

~~101~~101.INS		~~The following financial statements from Ameris Bancorp’s Form 10-Q for~~XBRL Instance Document - the ~~quarter ended September 30, 2017, formatted as~~instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document.

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104		Cover Page Interactive Data File - the cover page interactive data ~~files~~file does not appear in the Interactive Data File because its XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Income and Comprehensive Income; (iii) Consolidated Statements of Shareholders’ Equity; (iv) Consolidated Statements of Cash Flows; and (v) Notes to Consolidated Financial Statements.

* Management contract or a compensatory plan or arrangement.tags are embedded within the Inline XBRL document.



Dated: ~~November 9, 2017~~August 8, 2023			AMERIS BANCORP

			/s/ ~~Dennis J. Zember Jr.~~Nicole S. Stokes
			~~Dennis J. Zember Jr.,~~Nicole S. Stokes
			~~Executive Vice President,~~ Chief Financial Officer ~~and Chief Operating Officer~~ (duly authorized signatory and principal accounting and financial officer)